![]() CP and CDs are the instruments most widely used by non-financial and financial companies for short-term funding on an unsecured basis. While the markets for commercial paper (CP) and certificates of deposit (CDs) stagnated in the aftermath of the Great Financial Crisis (GFC), they have recently resumed their upward trajectory. Historically, US MMFs' absorption of short-term paper has tended to fall during stress episodes, creating strains for issuers in search of dollar funding, such as European banks. Various players have filled the gap left by MMFs, with non-financial companies and banks being particularly important in Japan, and non-bank financial institutions in the United States. We show that money market funds (MMFs) are still significant as investors in CP and CDs, although their footprint has shrunk in response to stricter regulation. ![]() We describe the origins and evolution of these markets in major jurisdictions. Commercial paper (CP) and certificates of deposits (CDs) are important short-term funding instruments for both financial and non-financial entities 1.
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