The bond industry's watchdog group considered the growing use of mortgage-backed and other asset-backed securities in adopting new standards for repurchase agreements - commonly used contracts for short-term lending among investors.

The Public Securities Association said the revised version of its master repurchase agreement reflects a broader use of assets such as mortgage securities in repurchase contracts. Although Treasury issues once dominated the repurchase, or repo, market, "various types of new participants are now involved," a PSA spokesman said. He could not give an estimate of the share that mortgage securities now account for but said these issues are seeing wider use.

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