There are three main types of retirement operations. Pension transactions are generally considered to be a reduction in credit risk. The biggest risk in a repo is that the seller does not maintain his contract by not repuring the securities he sold on the due date. In these cases, the purchaser of the guarantee can then liquidate the guarantee in an attempt to recover the money he originally paid. However, the reason this is an inherent risk is that the value of the warranty may have decreased since the first sale and therefore cannot leave the buyer with any choice but to maintain the security he never wanted to maintain in the long term, or to sell it for a loss. On the other hand, this transaction also poses a risk to the borrower; If the value of the guarantee increases beyond the agreed terms, the creditor cannot resell the guarantee. Beginning in late 2008, the Fed and other regulators adopted new rules to address these and other concerns. One consequence of these rules was to increase pressure on banks to maintain their safest assets, such as Treasuries. They are encouraged not to borrow them through boarding agreements. According to Bloomberg, the impact of the regulation was significant: at the end of 2008, the estimated value of the world securities borrowed was nearly $4 trillion. But since then, that number has been close to $2 trillion. In addition, the Fed has increasingly entered into pension (or self-repurchase) agreements to compensate for temporary fluctuations in bank reserves. The notional amount to be covered in LCR40.52 is based on contractual terms (for example.
B guarantee agreements) that regularly contain the method of calculating the amount to be covered (“nominal amount”). Because some deposits are settled at the maturity of the transferred assets, they do not meet the repurchase requirement before maturity, so that the ceder does not retain any effective control. If the remaining conditions of de-accounting in CSA 860 are met (i.e. the isolation and the right of the purchaser to wage or exchange the assets), the rights payable at maturity would be counted as a sale with a forward redemption contract (i.e. a derivative valued at fair value by the net result).