Repo markets are also a key requirement of liquid Government debt markets, acting as a bridge between money and debt markets. Repos conduct key functions for the efficient operation of debt markets; including, credit risk management, funding debt portfolios playing the yield curve and covering short positions and settlement failures.
Repos are a versatile instrument for a broad range of market participants with very different business models due to their hybrid nature; serving between a collateralized loan and a full transfer of ownership. 3.