The Evolution of Repo Contracting Conventions in the 1980s

[...]This paper examines how repo contracting conventionsevolved in the 1980s. In the next section, we consider therevival of repo financing in the 1950s and the contractingconventions associated with that revival. Section 3 describeshow the rising level and volatility of interest rates and growingTreasury debt fueled a significant expansion in the size of therepo market in the 1970s and early 1980s, as well as animportant change in how market participants used repos.Existing contracting conventions proved inadequate for theexpanding and changing market. Sections 4, 5, and 6 describehow new and previously unappreciated risks led participantsto modify those conventions.[...]