By re-characterizing the Repo 105 dealing as a sale, Lehman detached the account from its balance sheet (Durden, 2010).

Lehman frequently augmented its utilization of Repo 105 transactions in the time previous to reporting interludes to decrease its openly reported net leverage and balance sheet. Lehman's intermittent reports did not reveal the money borrowing from the Repo 105 transaction, even though Lehman had in reality borrowed tens of billions of dollars in these dealings, Lehman did not reveal the acknowledged responsibility to pay back the liabilities. Lehman utilized the money from the Repo 105 dealings to pay off other dangers, thus dropping both the entire debts and the entire assets accounted for on its balance sheet and decreasing its power percentages. Therefore, Lehman's Repo 105 dealing was made up of a two-fold procedure: performing Repo 105 dealings followed by the utilization of Repo 105 cash borrowings to pay down debts,...
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