Discount business
In banking, discount business ( discount credit ) means the purchase of bills of exchange by credit institutions that are not yet due . The bills of exchange are discounted, with the interest ( discount rate ) being deducted from the nominal value of the bills of exchange up to the due date . The discount rate calculated by the banks is based on the current discount rate of the central bank .
history
The discounting of bills of exchange by credit institutions has been permitted since August 1924 (Section 21 of the Banking Act), which considerably expanded the credit business of the institutions. The standardization of the bill of exchange law through the introduction of the Bill of Exchange Act in April 1934 made it easier for the institutes to process loans in the bill of exchange business, which now consisted of lending business and bill collection .
The main aim of the Bundesbank's policy was to control the credit supply behavior of banks and the demand for money and credit in the economy indirectly through changes in bank liquidity and interest rates on the money market . This was derived from § 15 BBankG a. F., who granted the Bundesbank the right to set the discount rate to influence the flow of money and the granting of credit. The rediscount business of the Bundesbank resulted from § 19 BBankG a. F. Switching as a means of credit and payment played a central role in the German economy for a long time. The (re-) discount volume therefore peaked in 1979/1980 and became the decisive source of central bank money supply .
Until 1986, the discount rate played the decisive role in the refinancing of credit institutions by the Bundesbank and as the key interest rate , because the banks were able to obtain liquidity at the discount rate by selling bills of exchange eligible for the Bundesbank . In December 1986 the share of discount credit in borrowing had fallen to 60%. Since 1987 the discounting of bills of exchange had lost its importance, so that the Lombard rate came to the fore. In comparison to the new open market policy instruments of the Bundesbank, bill refinancing gradually took a back seat ; Their share of total central bank loans was only 29.5% in 1994, compared to 83.5% in 1980. They were replaced by repo transactions . While their share of total refinancing was only 6% in 1980, in 1994 they made up 69.7%.
Legal bases
The legal basis for discount business is the Bill of Exchange Act , the Bundesbank Act and the respective general terms and conditions of the credit institutions . The discounting is legally a purchase contract according to § 433 BGB and is considered a banking business according to § 1 Paragraph 1 No. 3 of the German Banking Act . The activity in the discount business therefore required a banking license .
Today's meaning
The discount business was an important active business of the banks until 1986 and was considered a particularly secure lending business due to the strictness of exchange and the endorsement liability . In order to further increase the security of discount transactions, banks only discounted the bills of exchange up to the amount of the discount credit line granted to the customer. As a rule, only commercial bills of exchange with a remaining term of no more than three months are purchased. In their discount business, the banks followed the rediscount business of the Bundesbank because they mostly rediscounted the bills of exchange discounted by their bank customers at the Bundesbank. This discount transaction was carried out until December 1998 in accordance with Section 19 (1) No. 1 BBankG a. F. practiced within the framework of the discount policy . The Bundesbank granted the commercial banks rediscount quotas, i.e. limits set individually for each credit institution. The Bundesbank only accepted commercial bills of exchange with a maximum remaining term of three months and bills of exchange with at least three participants who were known to be solvent.
The change and thus the discount business is no longer relevant in the daily lending business, as it is not "machine or computer-capable" due to its document properties and therefore relatively labor-intensive and costly, as well as its function as a means of credit and payment in the German economy has largely lost. In addition, the discount business has lost its attractiveness for credit institutions due to the elimination of the possibility of rediscounting commercial bills of exchange at the German Bundesbank . The European Central Bank does not rediscount bills of exchange. Commercial bills of exchange can only be refinanced as a deposit .
Classification
- Non -bank-to-non-bank drawings, the so-called drawn bills of exchange
- Bank-on-non-bank drawings, usually financial bills
- Bank-on-bank drawings, mostly financial bills
- Classification according to creditworthiness in
- good, but not central bank-discountable bills of exchange
- central bank discountable bills of exchange
- bank notes
- Private discount
Individual evidence
- ↑ The Bundesbank's monetary policy , Deutsche Bundesbank, October 1995, p. 98 (PDF; 3.2 MB)
- ↑ a b Otmar Issing / Bernd Rudolph, Der Rediskontkredit , 1988, p. 41 f. (PDF; 6.8 MB)
- ↑ Werner Ehrlicher / Diethard B. Simmert, Changes in the monetary policy instruments of the Deutsche Bundesbank , 1988, p. 134.
- ^ The Bundesbank's monetary policy , Deutsche Bundesbank, October 1995, p. 109.
- ↑ Peter Bülow, WechselG, ScheckG, AGB , 2004, p. 75.
- ↑ Monthly Report of the Deutsche Bundesbank November 1998, p. 24.