Federal Funds Sold/Securities Purchased Under Resale Agreement (SF.BS.FedFundsSoldScrtyPurchAssets)

Federal Funds Sold/Securities Purchased Under Resale Agreement (SF.BS.FedFundsSoldScrtyPurchAssets) refers to a company’s excess cash reserves held at the central bank that have been sold to another bank. These are funds receivable from a borrowing bank. When banks sell (lend) excess reserves in the Fed Funds market they acquire assets (central bank/Fed funds sold) and lose a corresponding amount of reserves on their Balance Sheet. Fed funds are the loans that banks make to each other to meet the reserve requirement set by the central bank. These loans are generally overnight, since the reserve requirement needs to be met at the end of each day.

In addition, Federal Funds Sold/Securities Purchased Under Resale Agreement (SF.BS.FedFundsSoldScrtyPurchAssets) also refers to securities purchased by a financial institution under an agreement to sell them back at a higher price also known as repo contract. According to the Repo contract, the seller is obligated to buy back the securities at a later date. The repurchase price should be greater than the original sale price, the difference effectively representing interest; this is sometimes called the repo rate. A reverse repo is the same repurchase agreement from the buyer’s viewpoint.

Federal Funds Sold/Securities Purchased Under Resale Agreement (SF.BS.FedFundsSoldScrtyPurchAssets) includes:

  • Central bank/federal funds sold
  • Federal funds advanced to another party
  • Excess cash reserves at central bank sold
  • Securities purchased under resale agreements
  • Reverse repurchases agreements (reverse REPOs)

Federal Funds Sold/Securities Purchased Under Resale Agreement (SF.BS.FedFundsSoldScrtyPurchAssets) does not include: