Definition of triparty repo

In a repurchase, or "repo", transaction, an investor can borrow cash for a short period from another party, using securities as collateral for the loan. Investors with large portfolios of securities can thus lend these out and earn a return over time.    

At the centre of the US repo market sits the triparty model, where a custodian bank, Bank of New York Mellon and JPMorgan, helps to administer a repo agreement between two parties. An investor places its money with the custodian bank, which in turn lends it to another institution, and then assets are pledged as collateral for the loan.  [1]

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