When a bank in need of funds for a few days sells some of its government securities to a corporation with a temporary excess of funds, then buys them back shortly thereafter, this is a

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This is a repurchase agreement (also known as a repo), where the bank sells its government securities to another party (in this case, a corporation) with an agreement to buy them back at a slightly higher price shortly afterward. This allows the bank to temporarily access the funds it needs while the corporation earns a small return on its excess cash. This is different from a federal funds loan, which involves borrowing from another bank, a discount window loan, which is a loan from the central bank, or a commercial paper transaction, which involves the issuance of short-term debt by a corporation.

When a Bank in Need of Funds for a Few