Poinelli, Andrea; Pelizzon, Loriana; Tomio, Davide; … - 2026 - This draft: August 7, 2026
Sovereign bond markets are a cornerstone of the financial system, and their functioning is tightly linked to repo markets, where investors finance long positions and source bonds for short sales. We show, theoretically and empirically, that repo prices are set in the cash bond market: when...