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The purpose of this paper is to analyze the following aspects of the Republic of Serbia repo market: legislative frame in order to identify all documents related to repo market, the main repo market features and its role, institutional frame and participants, determination of the scope of the domestic repo market, the way of negotiating, processing and settlement of repo transaction, acceptable collaterals in the securities form, price aspects of repo transactions, transaction costs of completing repo transaction and suggestions for the improvement of this market. After analysing the facts, it is to be expected to gain ability to project future development trends of this segment of financial markets which has already become international.

The repo markets in many emerging market countries were established considerably later than in developed countries. Even though these markets have been growing steadily in some countries, they have not yet developed suffi ciently to provide all the possible benefi ts to diff erent entities, market segments and the fi nancial market as a whole. In this article, the author intends to answer the question: Why is the further development of repo markets in emerging market countries necessary? To answer this question, the author will rely primarily on the experience of developed economies, and to a lesser degree on the experien ce of developing countries, because the research in which the experience associated with the functioning of the repo markets in emerging market countries is presented is scarce and thereby insuffi cient to draw a conclusion about the issue. According to the author’s fi ndings, the multiple benefi ts of repo agreements and the existence of insuffi ciently exploited potential advantages of repo agreements and repo transactions can explain the necessity of the further development of repo markets in emerging market countries. [ABSTRACT FROM AUTHOR]

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The ongoing financial crisis mixed with the complexity of the modern financial (sub)system often induces one to a simplified criticism of the entire (sub)system. Even though we can agree on a general level that „something is wrong" the debate ends early on and (too) often does not go beyond this point. However, without a clearly identified problem we are doomed to the so called "vicious frustration cycle". Taking this into account, the paper identifies two specific problematic practices linked to repo transactions and loan agreements. In a certain context otherwise completely legal forms of repo transactions and loan agreements, become not only problematic, but potentially illegal. The notorious "Repo 105" transaction is used as a reference point for analyzing a similarly problematic practice of temporary loan agreements in the banking sector with the intent to formally avoid forming special reservations. The primary, if not the sole aim, of both contentious practices is a temporary improvement of the financial metrics and balance sheets, the final goal being a greater (undeserved) yield for the management teams in the form of bonuses and capital gains. [ABSTRACT FROM AUTHOR]