LeoGlossary: Bilateral Repo

Bilateral Repo is when investors and collateral providers directly exchange money and securities, absent a clearing bank. Bilateral repo transactions can either allow for general collateral or impose restrictions on eligible securities for collateral. Bilateral repo is preferred when market participants want to interact directly with each other or if specific collateral is requested.

These take place without the custodian being involved.

A repurchase agreement (Repo) is essentially a collateralized loan.

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