I provide the first systematic analysis of collateral choices in one of the main short-term funding markets, the … repurchase agreement (repo) market. In repos, long-term bonds serve as collateral connecting short-term and long-term funding … markets. In general collateral repos, banks can choose from a list of eligible bonds. Surprisingly, they often deliver more …

Defaults of financial institutions can cause large, disorderly liquidations of repo collateral. This paper analyzes the … dynamics of such liquidations. The model shows that (i) the equilibrium price of the collateral asset can overshoot; (ii) the …' by competing sellers of collateral; (iii) repo lenders should take into account creditor structure, strategic interaction …