The gilt repo market began in January 1996, and in March 1997 the Bank started conducting daily money-market operations in gilt repo. This article reviews the growth and structure of the market, looks at the uses of gilt repo that have contributed to this growth, and describes its impact on the gilt market and the sterling money markets in terms of greater liquidity, lower financing costs, improved hedging opportunities, and the development of a liquid market in secured money.
The first year of the gilt repo market