Steve Groves says:
September 29 2017 at 10:08 am
If the private company owns the gilts and is lending them to a bank then they are receiving cash. Which doesn’t make this process a ‘home for cash’ as you previously claimed. It means they would ctually have more cash for which they need to find a home!
Richard Murphy says:
September 29 2017 at 10:10 am
The private company buys them from the bank
And sells them back at a higher price next morning
That’s what I said
That’s how repo works
No, that’s not actually what you did say. You got it the wrong way around the first time:
He should know how the repo market works and that this involves the technical sale to banks of gilts overnight and their repurchase with what appears to be interest credited in the morning, in this way providing the large customers making use of this facility for their cash piles with the deposit guarantee that they crave and which the government will not itself supply.