Govpx Launches Repo Index to Track Booming Repurchase-Agreement Market

tracks the burgeoning market in U.S. Treasury repurchase agreements. New York City-based Govpx, which is owned by 42 government securities dealers and four interdealer brokers, has launched the Repo index, a comprehensive source of rates and trading volume for the market in U.S. Treasury repurchase agreements, a derivative instrument based on the benchmark U.S. government 30-year bond. Repurchase agreements are increasingly used by banks, mainly as a short- term hedge against their U.S. Treasury bond portfolios -the seller agrees to buy back securities at an agreed-upon price, interest rate and date. "The trillion-dollar-a-day repo market is the primary short-term funding mechanism for the nation's banks and financial institutions - yet until now there were no benchmarks of these rates," said Lawrence Leuzzi, chairman and chief executive of Govpx. He said the Repo index from Govpx was developed "to meet the growing needs of global bond dealers and investors in the valuation and creation of new financial products such as futures, options, forwards, etc. within the repo market."

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