While conventional deposits are generally credit risk instruments, there are residual credit risks. Although it is essentially a secured transaction, the seller can no longer redeem the securities sold on the maturity date. In other words, the repo seller is no longer in default in his commitment. Therefore, the buyer can keep the guarantee and liquidate the guarantee to recover the money loaned. However, the security may have lost its value since the beginning of the transaction, as the security is subject to market movements. In order to reduce this risk, deposits are often over-undersured and are subject to a daily market margin (i.e. if assets lose value, a margin call can be triggered to ask the borrower to publish additional securities). Conversely, when the value of the security increases, the borrower runs a credit risk, since the creditor is not allowed to resell them. Despite regulatory changes over the past decade, systemic risks remain for the repo industry. The Fed continues to worry about a failure by a large trader, which could spur a fire sale under money market funds, which could then have a negative impact on the broader market. . .

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