Talk:Repo 105

Why was this article deleted seconds after I started creating it?

repo 105 is a term used in business news in several countries. It is being reported in connection with an Examiner report recently published about irregularities at Lehman Brothers. BTW I am surprised at the speed in which this article was deleted from Wikipedia, which forces me to fight the deletion instead of spending precious moments improving the article.

This article is extremely interesting and notable, but can maybe be included in general Lehman brothers article. Ulner (talk) 17:58, 13 March 2010 (UTC)

Do we know for sure that this practice was utilitilized only at Lehmans? Ottawahitech (talk) 15:23, 14 March 2010 (UTC)

Looks like the SEC is now trying to determine if others have not used similar accounting "techniques" Ottawahitech (talk) 05:39, 1 April 2010 (UTC)

Linklaters Involvement

I have read just read through several of the citations attached to this article, notably The Times Article together with a copy of the Examiner's Report which includes Linklaters advice to Lehman Brothers in Appendix 17 at page 20 and nowhere in the materials is there anything which supports the paragraph in this article stating:

Law firm Linklaters has been accused of negligence in their advice to Lehman, which collapsed in 2008. Linklaters advised Lehman that under British law a Repo 105 arrangement to hide $50 billion of assets and loans was legal, despite Lehman having been told by its advisers in America that the move was illegal. Though Repo 105 arrangements are technically legal in Britain, Lehman shareholders have instigated legal proceedings against Linklaters for malpractice and neglecting their fiduciary duty of care.

Rather, having now read through the Opinion, it appears that all Linklaters did was to advise that under English law, the arrangements which had been presented to them gave rise to a 'True Sale' over the securities in question, rather than a transfer of them subject to a charge back in favour of the transferor (Lehmans).

Nowehere in the opinion does it seem that Linklaters has been invited to explicitly comment on the accounting treatment (which makes sense, as that would not be the job of a legal firm). Nowhere does it seem that Linklaters has been asked to comment on the reputational risk associated with such arrangements (and law firms frequently give advice on such things if requested to do so by their clients).

Additionally, there is no question of any law firm saying whether the arrangements are legal or illegal. As a factual proposition, it would be perfectly legal for any bank to enter into such arrangements, whether in the US or the UK. Of course, how such arrangements are then accounted for is a matter for the accountants, which seems to be where the problem is here. If the law of a jurisdiction (such as the UK) says the arrangements are a 'True sale' then you get one accounting treatment. If however the law of a jurisdiction (such as the US) says identical arrangements are viewed as giving rise to a 'charge' then you can get a completely different accounting treatment. It should be no surprise to anyone that the UK and US legal systems can view the same arrangements differently, otherwise the citizens of both countries would not need to elect different parliaments. But on the information published to date, neither jurisdiction is saying that the basic legal analysis of the arrangements points to something which is illegal.

I have removed this paragraph. It may be possible to partially reinstate it if an alternate citation can be provided which correctly supports the statement being made. Kind regards--Calabraxthis ^(talk) 14:48, 19 March 2010 (UTC)

Thanks, Calabraxthis, for your contribution - much appreciated. Ottawahitech (talk) 19:05, 19 March 2010 (UTC)

Michael Lewis

Michael Lewis used the term in his interview today on NPR (Bob Edwards Weekend); presumably The Big Short has material on it, that may or not already be reflected in the accompanying article.
--Jerzy•t 18:48, 10 April 2010 (UTC)

definition of term

It would be helpful to have a technical definition of just what "Repo 105" is/was. As I understand it, under British accounting rules a repo that had a duration of some period longer than one year could be treated as a "true sale", while the standard accounting treatment for a repo is as a collateralized loan. What makes this whole thing odd is just why a repo would ever be considered a "loan" when the title to the collateral transfers to the lender. — Preceding unsigned comment added by 96.245.71.7 (talk) 13:46, 15 January 2013 (UTC)