Sweep Accounts Interview Question:

Why companies used Repo Sweeps?

Submitted by: Administrator

Repo Sweeps are for companies that are concerned about the safety of the bank usually mandate of the companies/institutions charter and not due to the opinions of the employees or financial staff. In this arrangement, swept funds on deposit with the bank are secured by some of the bond holdings of the bank. If the bank were to fail, the depositor would just be given the bond holdings and then could sell the bonds to get their money back (unless something happens to the bond prices in the interim).
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