Federal securities
Federal securities are the securities of the federal government and its special assets , also known as public bonds or federal government bonds .
General
They are used for financing of deficits in the federal budget and by the Federal Republic of Germany - Finance Agency administers. As a debt manager with technical support from the Deutsche Bundesbank, the finance agency provides all services relating to the issue of federal securities.
Types of federal securities
The Federal Republic of Germany issues the following securities through the finance agency:
- Federal bonds (Bunds) with a term of 7, 10, 15 or 30 years
- Federal bonds (Bobls) with a term of 5 years
- Federal treasury notes (treasures) with a term of 2 years
- Interest-free treasury bills (Bubills) with a 6 or 12 month term
-
inflation-indexed federal securities (ILB)
- inflation-indexed federal bonds with a term of 5 years
- Federal inflation-linked bonds with a term of 10, 15 or 30 years
The issue of the following (private investor) papers was discontinued on December 31, 2012:
-
Federal Treasury Bonds ( bonds with rising interest rates )
- Type A (term 6 years - interest was paid annually in arrears)
- Type B (term 7 years - interest was collected ( compound interest effect ) and paid out at the end of the term)
- Financing treasures with a 1 or 2 year term
- Days bond (indefinite life, similar to a savings account in the form of an accumulation Federal bond)
In 2019, the last two remaining private investor papers were redeemed with the federal treasury note and the daily bond.
The first issue of a green federal security in the form of a 10-year green federal bond is planned for September 2020.
running time
The term of the federal securities varies from short-term ( interest-free treasury note or federal treasury note ) to long-term ( federal bonds ). Since new federal securities are constantly being issued and the maturities of previously issued papers are continuously decreasing, around 60 different federal securities with maturities from a few months to 30 years can be traded permanently.
Issuing procedure
Federal securities are also differentiated according to their issuing procedure into one-off issues and continuous issues . Until business with private investors was discontinued at the end of 2012, federal treasury bills , financing treasures and the daily bond were issued as continuous issues . They could be acquired permanently by investors who determined the scope or volume of an issue through their demand. The federal securities that can still be purchased today will all be issued as one-off issues. Bunds, federal bonds, federal treasury bills, federal interest-free treasury bills and inflation-indexed federal securities are only offered for purchase at certain times. The issuer determines the targeted issue volume in advance. The issue takes place in the context of an auction in which registered banks of the "Federal Issues Bidder Group" can participate. They then sell the majority of the bonds on to other investors. Due to the increased credit requirement and thus the issue volume of the federal government to cope with the COVID-19 pandemic , several issues will be carried out in the banking syndicate in 2020 . In the past, this issuing procedure was mostly chosen for the issue of new federal securities, for example in 2015 for the first issue of a 30-year inflation-indexed federal bond.
Stock exchange trading
With the exception of interest-free treasury bills and tap issues, all federal securities are traded on German stock exchanges and on electronic trading platforms. Private investors can buy or sell them through their bank every trading day. The Deutsche Bundesbank maintains the market for federal securities by ensuring that trading takes place at fair prices. The Finance Agency also participates in trading in federal securities by supporting the Bundesbank and other market makers on electronic trading platforms and in OTC (over the counter) trading in federal securities.
Technically, federal securities can be traded as book- entry securities by being entered in the federal debt register , whereby the investor receives a co-ownership share in the collective securities portfolio in accordance with Section 6 (1) DepG .
safety
The Federal Republic of Germany is one of the safest debtors in the world. The securities issued by the federal government are secured by means of German tax revenue . Germany is regularly awarded the highest possible creditworthiness by international rating agencies with the AAA rating . In addition, investments in federal securities are gilt-edged within the meaning of Section 1807 BGB .
Use of the credits
In addition to the federal budget , the loans taken out through federal securities benefit proportionally the following federal special funds :
- Financial market stabilization fund (has its own credit authorization)
- Investment and repayment fund (has its own credit authorization)
- Economic stabilization fund (has its own credit authorization)
- Restructuring fund for credit institutions (has its own credit authorization)
- Provision for final payments for inflation-linked federal securities
- Energy and Climate Fund
- Development aid fund
- Municipal Investment Promotion Fund
- Childcare expansion and childcare financing
- Digital infrastructure
At the end of 2019, the total volume of federal securities outstanding was EUR 1,130.2 billion.
Web links
- Internet presence of the Federal Republic of Germany - Finanzagentur GmbH.
- Internet presence of the Federal Ministry of Finance
- Internet presence of the Deutsche Bundesbank
Individual evidence
- ↑ Internet site on federal securities , Bundesbank, accessed on January 23, 2020.
- ↑ Internet site on federal securities , Finance Agency, accessed on March 18, 2015
- ↑ Overview of federal securities , Finance Agency (PDF 59.7kB), accessed on January 23, 2020
- ↑ current monthly reports of the Federal Ministry of Finance , overview "Kreditmarktmittel", accessed on March 18, 2015.
- ↑ Federal securities website , new 30-year inflation-indexed bond, accessed on July 1, 2015.
- ↑ The treasury note goes, security remains , eFORUM: Federal securities 2012 (PDF; 801 kB), accessed on March 18, 2015.
- ^ Website on green federal securities , Finance Agency, accessed on July 3, 2020
- ↑ Internet site on federal securities , Finance Agency, accessed on March 18, 2015
- ↑ Internet site on the auction process , Finance Agency, accessed on March 18, 2015
- ↑ Germany places billion dollar 30-year federal bond , Handelsblatt, accessed on July 3, 2020.
- ↑ Press release on the issue of the first 30-year inflation-indexed federal bond , Finanzagentur (PDF; 27 KB), accessed on July 3, 2020
- ↑ Website on federal debt management , Federal Ministry of Finance, accessed on March 18, 2015
- ↑ Website on secondary market activities in federal securities , Finance Agency, accessed on January 23, 2020
- ↑ Federal Borrowing Report 2018 p. 31ff , Federal Ministry of Finance (PDF; 1.9 MB), accessed on January 23, 2020.
- ↑ Economic Stabilization, WSF website, accessed on July 3, 2020.
- ↑ Individual list of federal securities in circulation , Finance Agency (XLS; 35 kB), accessed on January 23, 2020.
