【正文】 ly trade in agency issues. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 20 Bankers’ Acceptances ? A bankers’ acceptance is a time draft drawn on and endorsed by an importer’s bank. ? Acceptances are used in international trade because most exporters are uncertain of the credit standing of their importers. ? The issuing bank unconditionally guarantees to pay the face value of the acceptance when it matures, thus shielding exporters and investors in international markets from default risk. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 21 Bankers’ Acceptances ? Acceptances carry maturities ranging from 30 to 270 days, with 90 days being the most mon. ? They are traded among financial institutions, industrial corporations, and securities dealers as a highquality investment and source of ready cash. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 22 How Acceptances Arise Importer applies for line of credit Importer’s bank issues letter of credit in favor of exporter Letter of credit authorizes the drawing of a time draft Importer’s bank accepts time draft from exporter’s bank Importer’s bank pays exporter’s bank discounted value of bankers’ acceptance, and then holds or sells it Bankers’ acceptance is redeemed at maturity ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 23 The Growth and Decline of Acceptance Financing ? The volume of US$ acceptances outstanding grew rapidly, from less than $400 million in 1950, to slightly more than $7 billion in 1970, and almost $80 billion in 1984. ? Then the volume declined sharply to $10 billion in 2020, as several leading export nations entered a recession, as economic problems developed in Asia, and as businesses turn to other payment and financing methods. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 24 Acceptance Rates ? Acceptances do not carry a fixed rate of interest, but are sold at a discount in the open market like Treasury bills. ? The yield on acceptances is usually only slightly higher than the yield on Treasury bills, and close to the negotiable CD rates offered by major banks, because of the high credit quality of the banks that issue the acceptances and CDs. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 25 Acceptance Rates Data Source: Board of Governors of the Federal Reserve System % 33 . 544 . 555 . 566 . 51991 1993 1995 1997 1999 2020C o m m e rci a l Pa p e rBa n ke rs 39。 other transactions Banks’ Money Market Roles Agents in trust for property management on behalf of bank customers Direct lenders to money market borrowers Guarantors of performance amp。 other money market borrowers (demanders) Acmodating banks Funds brokers The Central Bank Absorbing excess funds Supplying additional funds ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 69 Federal Funds ? Total federal funds borrowings by banks in the . exceeded $600 billion as the 21st century began. ? Most federal funds loans are either overnight transactions or continuing contracts that h。 credit policy Custody agents for safekeeping securities owned by market participants and pledged as collateral for loans ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 65 Federal Funds ? Federal funds are any monies available for immediate payment (. sameday money). ? They are generally transferred from one depository institution to another by simple bookkeeping entries requested via an online puter system, by wire, or by telephone. ? Federal funds are the principal means of making payments in the money market. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 66 Federal Funds ? The term federal funds came about because early in the development of the market, the principal source of immediatelyavailable money was the reserve balance that each Federal Reserve System member bank had to keep at the Federal Reserve bank in its region. ? Today, the federal funds market is broader in scope – some deposits with mercial banks are also available for immediate transfer. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 67 Federal Funds ? Banks and other depository institutions must hold in a special reserve account liquid assets equal to a fraction of the funds deposited with them by the public. ? The required legal reserves may be either vault cash or reserve balances with the regional Federal Reserve banks. ? Since the reserves earn little or no ine, most bankers try to lend out excess reserves. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 68 The Structure of the Federal Funds Market Banks amp。 Rate of Return on Commercial Paper ? Growth of Commercial Paper ? Market Yields on Commercial Paper ? Advantages amp。 terrorism ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 10 Market Yields on Commercial Paper Data Source: Board of Governors of the Federal Reserve System 234567891991 1993 1995 1997 1999 2020F e d e ra l F u n d sC o m m e rci a l Pa p e rBa n ke rs 39。 Rate of Return ? Maturities of . mercial paper range from three days (“weekend paper”) to nine months. ? Most mercial paper is issued at a discount from par, and yields to the investor are calculated by the bank discount method, just like Treasury bills. DR = Par value – Purchase price ? 3