THE REPO GAME

Wall Street has long relied on repo for short-term finance. But new banking rules have raised the cost of those trades, shrinking the market

HOW REPOS WORK

Investment funds, longing for cash, swap Treasury notes for hard money from a bank. After a short while, the fund takes back the paper Every $100 in repo trades means banks must put aside $6 in capital

Cash-rich insurance companies or money market funds buy the government bond from bank, agreeing to sell it back at a small margin

Large Wall Street banks stand in the middle of the trade and collect a small fee on a deal