Download This PaperRepurchase Agreements with Negative Interest Rates
7 Pages Posted: 4 Oct 2004
Abstract
Contrary to popular belief, interest rates can drop below zero. From early August to mid-November of 2003, negative rates occurred on certain U.S. Treasury security repurchase agreements. An examination of the market conditions behind this development reveals why market participants are sometimes willing to pay interest on money lent.
Keywords: repurchase agreements, gcf repo, general collateral, fixed income clearing corporation, dealer finance
JEL Classification: G28, G18, H63
Suggested Citation: Suggested Citation
Michael J. Fleming (Contact Author)
Federal Reserve Bank of New York ( email )
33 Liberty Street
New York, NY 10045
United States
212-720-6372 (Phone)
212-720-1582 (Fax)
HOME PAGE: http://www.newyorkfed.org/research/economists/fleming/
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