A retirement operation (repo) is a two-legged operation that is similar to a secured loan. A cash borrower sells securities (the collateral) to the lender and agrees to redeem them later at a predetermined price.2 Typical cash borrowers are asset managers, pension funds and insurance. Typical funders are money market funds and corporate treasurers. Deposits are provided by large brokers, who are themselves major users of repo to finance marketing inventory, obtain short-term financing or invest cash. As the name suggests, Specialness is actually a phenomenon that should only happen occasionally for single titles. However, Figure 1 shows that, in recent years, speciality has been the rule rather than the exception for German government bonds. In addition, since 2015, there has been increased volatility, i.e. a variation in the intensity of deposits at annual and quarterly fines. This is often associated with the fact that financial intermediaries hold German government bonds that are considered safe and liquid at regulatory reference dates and do not offer them in the repo market (see BIS, 2017).
The following section outlines trading activity in the euro repo market over the 2006-18 period. We discuss how different segments performed in terms of liquidity and pricing efficiency. The third and fourth sections examine the intensity of sectoral arbitrages and the tendency of market participants to specialise in individual collateral segments. The final section of the finals. The withdrawal price is calculated from the purchase price plus agreed interest (the corresponding interest rate is called reposatz) which depends on the quality of the security. . . .