The world of fixed income is dynamic and ever-changing, with new instruments, applications and processes being developed all the time. Although it is a commoditised and standardised product of long standing, repo, short for ‘sale and repurchase agreement’, is no different and we have new variations on a theme to talk about in this updated third edition. The devil is in the detail, as countless unimaginative journalists like to say, and the new developments in repo since the first edition of this book was published in 1999 are mainly of a detailed nature. As we said, repo is in essence a standardised product, as well as a very simple and basic one; this means it is easily adapted to new applications in new markets.
Another thing one would hope has been adapted and improved is my writing. It would be a poor author, in any field, whose quality of writing style and delivery had not improved over a period of seven years, so this third edition incorporates some additional bells and whistles to convince you that its purchase was worthwhile! What do we have that is new? Worked examples are now illustrated with Bloomberg screens, which most readers can expect to come across whether they are at a bank or indeed in the finance or economics department of their university. Other new content for this third edition includes:
• basket repo funding of portfolios of assets;
• illustrations of repo for structured finance securities such as asset-backed securities;
• synthetic repo or total ...