Repo operations are done in three forms: specified delivery, tri-party and retention (the “selling” party holding the guarantee for the duration of the repo). The third form (Hold-in-Custody) is quite rare, especially in development markets, especially because of the risk that the seller will become insolvent before the repo expires and the buyer will not be able to recover the securities that have been reserved as collateral for the transaction. The first form – the specified delivery – requires the delivery of a predefined loan at the beginning and expiry of the contract term. Tri-Party is essentially a form of shopping cart of the transaction and allows for a wider range of instruments in the basket or pool. In the case of a tri-party-repo transaction, an external clearing agent or bank between the “seller” and the buyer is invited. The third party retains control of the securities that are the subject of the contract and processes payments from the “seller” to the “buyer”. 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 collateral loses value, a margin call may 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. If this is considered a risk, the borrower can negotiate a subsecured repo.  Despite the similarities between secured loans, deposits are actual purchases. However, since the buyer has only temporary ownership of the collateral, these agreements are often treated as loans for tax and accounting purposes. In the event of insolvency, investors can sell their assets in most cases. This is an additional distinction between repo credits and secured loans; For most secured loans, bankrupt investors would be subject to automatic stay. For a longer period of time, more factors can influence the creditworthiness of the redemption and changes in interest rates have a greater impact on the value of the asset repurchased. The main difference between a maturity and an open repo is between the sale and redemption of the securities. Beginning in late 2008, the Fed and other regulators put in place new rules to address these and other concerns. The impact of these rules has been increased pressure on banks to maintain their safest assets, such as Treasuries. According to Bloomberg, the impact of the regulation has been significant: at the end of 2008, the estimated value of global securities borrowed in this way was nearly $4 trillion.
But since then, that figure has approached $2 trillion. In addition, the Fed has increasingly entered into retreat operations (or reverse retirement operations) to compensate for temporary fluctuations in bank reserves. [ii] Some frequent credit events are a default on the underlying mortgage, the asset acquired that is not greater than what is permitted under the retirement facility, or an insolvency event that occurs in relation to the underlying borrower. . . .