Repos, a form of secured, short-term lending/borrowing, have been a mainstay for many financial institutions to productively invest excess funds for

Repos, a form of secured, short-term lending/borrowing, have been a mainstay for many financial institutions to productively invest excess funds for a short-term or, conversely, to obtain additional liquidity. However, recently several regulators have suggested to banks that they reduce their participation in repo markets. Briefly discuss the issues around the use of (and reliance on) repos by banks.