ABSTRACT
This chapter deals with collateralised finance arrangements, where these arrangements are entered into by commercial or central banks and other big players on the financial markets, such as insurance companies, investment firms and certain government bodies. In the context of collateralised finance arrangements, collateral serves as security, but also as a means of enhancing financial market liquidity. Collateralised finance arrangements may reduce the cost of credit and enlarge the liquidity of both cash and securities markets. The chapter discusses the internationally used master agreement to document repo transactions is the year 2000 version of the Global Master Repurchase Agreement (GMRA), published by The Bond Market Association (TBMA) and the International Securities Market Association (ISMA) currently called the International Capital Market Association (ICMA). The master agreement itself deals with aspects of the parties' legal relationship which are expected to be unchanging, such as definitions, representations and warranties, provisions regarding payment risk, termination, insolvency risk, governing law and forum clauses.
