tri-party repo

A tri-party repo is a financial agreement where a borrower sells securities (like government bonds) to an investor with a promise to buy them back later, usually within a short period. In this arrangement, a third-party agent (such as a clearing bank) manages the collateral and ensures both sides meet their obligations, handling the transfer and safekeeping of securities. This setup provides security and efficiency for short-term funding, lowering risks for both parties and enabling smooth liquidity management in financial markets.