【導(dǎo)讀】LearningObjectives?mercialpaper.LearningObjectives?economy.oftheissuingpany.paper.Dealerpaper,orindustrialpaper,isissuedby. months.likeTreasurybills.DR=Parvalue–Purchaseprice?

　　

【正文】 11 57 Dealers in the Money Market ?The bulk of the dealers’ operating capital is obtained through borrowings from mercial banks and other institutions. ? The two most heavily used sources of dealer funds are demand loans from the largest banks and repurchase agreements with banks and other lenders. ? A demand loan may be called in at any time if the banks need cash urgently. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 58 Dealers in the Money Market ? Under a repurchase agreement (RP), the dealer sells securities to a lender but makes a mitment to buy back the securities at a later date at a fixed price plus interest. ? RPs are simply a temporary extension of credit collateralized by marketable securities. ? Term RPs are for a set length of time (overnight, a few days, 1 month, 3 months, …) while continuing contracts may be terminated by either party on short notice. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 59 Dealers in the Money Market ? Interest ine from RPs = Amount ? Current ? Number of days loaned . of loan RP rate 360 days ? Periodically, RPs are marked to market. If the price of the pledged securities has dropped, the borrower may have to pledge additional collateral. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 60 Sources of Dealer Ine ? Dealers hope to earn a profit (the positive spread between the bid and ask prices) from their marketmaking activities. ? By correctly anticipating interest rate movements, dealers may earn sizable position profits too. ? If interest rates fall (and security prices rise), dealers will experience capital gains on a long position (but losses on a short position). ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 61 Sources of Dealer Ine ? Dealers also receive carry ine, the difference between interest earned on the securities they hold and their cost of borrowing funds. ? In addition, dealers receive miscellaneous service fees for their advice and assistance to customers. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 62 Dealer Positions in Securities ? Dealer holdings of securities are both huge and subject to erratic fluctuations, due mainly to interest rate movements and expectations. ? Today, dealers make heavy use of interest rate hedging tools to further protect their portfolios from losses due to changes in interest rates. ? They are active participants in the financial futures markets and are also making increased use of forward mitments. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 63 Government Security Brokers ? Government securities dealers usually trade among themselves through brokers. ? Government security brokers do not take investment positions themselves, but try to match bids and offers placed with them by dealers and other investors. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 11 64 Banks in the Money Market Principal channel for payments for loans, securities amp。 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。 payment Channel for government money amp。 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。 large depositors with excess reserves available (suppliers) Banks needing more legal reserves 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 th