Editing Federal Reserve (section)

===== Repurchase agreements =====
{{Further|Repurchase agreement}}

To smooth temporary or cyclical changes in the money supply, the desk engages in [[repurchase agreement]]s (repos) with its primary dealers. Repos are essentially secured, short-term lending by the Fed. On the day of the transaction, the Fed deposits money in a primary dealer's reserve account, and receives the promised securities as [[collateral (finance)|collateral]]. When the transaction matures, the process unwinds: the Fed returns the collateral and charges the primary dealer's reserve account for the principal and accrued interest. The term of the repo (the time between settlement and maturity) can vary from 1 day (called an overnight repo) to 65 days.<ref>{{Cite web |date=August 2007 |title=Repurchase and Reverse Repurchase Transactions |url=http://www.ny.frb.org/aboutthefed/fedpoint/fed04.html |access-date=August 29, 2011 |website=Ny.frb.org |publisher=Federal Reserve Bank of New York}}</ref>