The U.S. government is trying to break a backup in the $7-trillion-a-day repurchase market for Treasuries with a proposal that would pay owners of Treasuries to borrow. The logjam has caused "fails" to top $5 trillion. "A negative rate repo is somewhat counterintuitive as basically, a lender is not only lending money, but paying a borrower to take that money," said Robert Toomey, managing director of SIFMA. "The borrower has something, in this case a particular security, that the lender really wants. It's essentially paying a premium to get a particular security."
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