Money market paper
A money market paper (also liquidity paper or treasury bills ) is a special security that is issued (issued) to raise short-term money. It is a money market instrument ; the term is usually up to one year.
General
As a rule, money market papers are discounted bonds : The purchase or sale price is derived from the nominal value less the total interest accruing for the term . It is to be calculated as follows:
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species
Money market papers can be differentiated according to the type of issuer (public sector, "state" for short, or company):
State as the issuer
Germany
In Germany, treasury bills - money market paper issued by the state with a maximum term of 3 months - are unusual, as the state covers its cash credit needs in other ways.
The state issues interest-free Treasury notes ( "Bubills" , "U- Schätze" ) as federal securities , which the Federal Republic of Germany has issued with a minimum denomination of EUR 1 million until 2004 and a minimum denomination of EUR 0.01 since then. The return for the buyer results from the difference between the nominal value and the purchase price. They are available with terms of six or twelve months. Technically, interest-free treasury notes can be traded as book- entry securities by entering them 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 .
Switzerland
Money market book claims ( GMBF ) are issued by the Swiss Confederation and other public regional authorities in Switzerland. They were first issued by the Swiss Confederation in 1979 and have since held a firm place in the Swiss money market. GMBFs usually have a term of between three and twelve months and earn interest on a discount basis. As a supplement to its monetary policy instruments, the Swiss National Bank introduced its own money market book claims, so-called SNB bills , in 2008 . These have a term of between one week and one month.
United States
In the USA there are Treasury bills in the form of Treasury Bills , which have been issued since April 7, 2008 with a minimum denomination of 100 US dollars (previously 1,000 US dollars) and discounted by the US government.
Company as an issuer
Certificates of deposit or certificates of deposit (English certificates of deposits , abbreviated CD ) are money market papers issued by banks as bearer papers . Their advantage is that they can be traded on secondary markets . An investor can thus sell a CD again before the due date and thus cover an unforeseen capital requirement.
Commercial papers (abbreviated CP ) are primarily issued by first-class industrial addresses or in the form of secured money market paper ( English asset-backed commercial paper , abbreviation ABCP) by special issuing companies ( conduits ). As a rule, an excellent rating of the issuer is a prerequisite for placement and trading. Commercial papers are issued to meet short-term credit needs.
See also
Individual evidence
- ^ Deutsche Bundesbank: Geldmarktpapier. Glossary entry. Retrieved October 21, 2015 .
- ↑ Cordula Heldt: Treasury bills. In: Gabler Wirtschaftslexikon. Retrieved September 17, 2017 .
- ↑ Interest-free Treasury Notes ("Bubills"). Federal Republic of Germany - Finanzagentur GmbH, accessed on October 21, 2015 .
- ^ Sarah Siddons: How Treasury Bills Work. In: HowStuffWorks.com. July 16, 2008, accessed June 27, 2013 .
- ↑ Jörg Jasper: CD. In: Gabler Wirtschaftslexikon. Accessed August 31, 2018 .
