Repo

A repo (repurchase agreement) is a secured loan in disguise. A bank that needs cash sells, say, Treasury bonds to a lender and agrees to buy them back tomorrow at a slightly higher price. The difference is the interest. The bonds act as collateral, so if the borrower fails, the lender keeps them.

The repo market is where trillions of dollars of this overnight borrowing happens every day; it is the plumbing that keeps the financial system liquid. When it jams, as in September 2019 when US repo rates suddenly spiked, central banks rush in to unblock it.