Discount credit

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Under discount credit was understood Banking purchasing Jump by credit institutions .

Legal bases

The discount loan is a banking transaction in accordance with Section 1 (1) No. 3 of the German Banking Act (KWG). As part of this banking business, banks are allowed to purchase bills of exchange (and checks ) from their bank customers. Under civil law, the discount credit is a purchase contract according to Section 433 (1) BGB . The object of purchase is the bill of exchange, the purchase price is the equivalent value credited to the bank customer's current account . By making book money available , the discount loan is a money loan .

procedure

The banks granted discount loans only to those bank customers ( borrowers ) with whom they had concluded a loan agreement . This contract resulted in the maximum volume of discount credit that could be drawn upon on a revolving basis ( discount credit line ). In addition to this quantitative restriction , the loan agreement also contained qualitative restrictions that affected the bills of exchange themselves. The changes had to

If the bills of exchange submitted to the bank by their customers matched the terms of the credit agreement, it bought the bills of exchange. To do this, it determined the nominal value of the bills of exchange and deducted the discount rate (calculated as the interest rate between the date of submission and the due date of the bill of exchange); the net amount has been credited to the current account. Therein lay lending because the bank to the customer's bill of exchange securitized receivables prior to their maturity bevorschusste . For this reason, the discount loan was one of the loans in accordance with Section 19 (1) No. 2 KWG under banking law .

The bank now had two options. On the one hand, it was able to hold the discounted bills of exchange until they were due and then present them to the drawee for payment via the collection route . By paying she got back the value that she had paid her customer. On the other hand, it was able to resell the bills of exchange to the Deutsche Bundesbank at any time until shortly before their due date by way of rediscount and then received the countervalue of the bills in advance back in advance.

The discount credit was considered to be a secure loan for banks, since the parties involved in the bill were jointly and severally liable in accordance with Art. 47 (1) Bill of Exchange Act .

history

Due to the originally great importance of bills of exchange as a means of credit and payment in the economy , the Banking Act of August 1924 allowed for the first time the discounting of bills of exchange by credit institutions (Section 21 of the Banking Act). Since at the same time the refinancing of credit institutions at the Reichsbank through rediscount was permitted, discount credit played a major role in the credit business of the institutes for a long time .

The banks were able to obtain liquidity at the discount rate by selling bills of exchange eligible for the Bundesbank. The (re-) discount volume reached its peak in 1979/1980 and became the decisive source of central bank money supply . In December 1986 the share of discount credit in borrowing had fallen to 60%. Since January 1987, the discounting of bills of exchange had lost its importance, whereby the Lombard policy came to the fore. The share of bill refinancing in 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%.

In Germany, the Bundesbank's discount transactions were up to December 1998 as part of its discount policy in Section 19 (1) No. 3 BBankG a. F. regulated. Here and in its general terms and conditions, it stipulated the conditions under which the banks were granted a rediscount option. These conditions were transferred accordingly to the discount business of credit institutions with their bank customers.

The change and thus the discount credit is of no importance in day-to-day banking business today, as it was not "machine or computer-capable" due to its document properties and thus relatively labor-intensive and costly, and its function as a means of credit and payment in the German economy was largely has lost. This is in turn related to the fact that the European Central Bank (ECB) has not operated any rediscount business since January 1999.

European Central Bank

Since January 1999, the Bundesbank has only acted as the executive body of the ECB in monetary policy because the task of monetary policy as a whole has been transferred to the ECB. With the transfer of responsibility for monetary policy to the ECB, the main refinancing operation replaced the earlier discount credit in January 1999. The ECB does not rediscount bills of exchange, but instead provides the commercial banks with other liquidity.

The discount credit has lost its former importance for credit institutions due to the elimination of rediscounting options for commercial bills of exchange at the Bundesbank. Commercial bills of exchange can only be refinanced as a deposit . For these reasons, discount credit is no longer important today; it can only develop its credit function in the non-bank sector.

See also

Individual evidence

  1. ↑ Martin Werdenich, Modern Cash Management: Instruments and Measures for Securing and Optimizing Liquidity , 2008, p. 157 f.
  2. ↑ Verlag Dr. Th. Gabler, Gabler Banklexikon , 1983, Sp. 630
  3. ↑ a b Otmar Issing / Bernd Rudolph, Der Rediskontkredit , 1988, p. 41 f. (PDF; 6.8 MB)
  4. ↑ Werner Ehrlicher / Diethard B. Simmert, Changes in the monetary policy instruments of the Deutsche Bundesbank , 1988, p. 134.
  5. ^ Deutsche Bundesbank, Monthly Report , October 1995, p. 109
  6. ↑ Credit comparison to discount credit
  7. ↑ Monthly Report of the Deutsche Bundesbank November 1998, p. 24.