Tag Archives: Commercial Paper

Japan Daily

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This means they will accept it as collateral for the unlimited USD loans from the Fed.

This will not end well.

BOJ to Accept Asset-Backed Commercial Paper as Collateral from Tuesday

TOKYO (Dow Jones)–The Bank of Japan said Monday it will accept as collateral asset-backed commercial paper guaranteed by the bank’s counterparty financial institutions, starting Tuesday. This is a temporary measure until the end of April 2009 to ease tension in the short-term money market, the BOJ said.

Earlier this month, The BOJ announced a number of steps to ensure the smooth functioning of the country’s money markets, including providing greater access to U.S. dollar funds through a swap agreement with the U.S. Federal Reserve Board, and broadening the kinds of collateral the BOJ would accept for repurchase agreement transactions.


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( Commercial Paper + C&I ) * Outstanding

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Summation of Commercial Paper Outstanding AND Combined Commercial and Industrial Loans Outstanding

Combined commercial and industrial loans and commercial paper show a leveling off after the initial drop.

Back in mid 2006, I remember commenting that I thought the government deficit was no longer high enough (given everything else that was going on) to support the credit structure.

The last push up was largely a product of fraudulently obtained sub prime and Alt-A loans.


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Commercial paper outstanding continues to fall

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Seems to be unwinding in an orderly fashion as lending continues to flow back to the banking sector.

UPDATE 1-US commercial paper in biggest weekly drop since Aug

Thu Dec 20, 2007 10:41am EST

NEW YORK, Dec 20 (Reuters) – The size of the U.S. commercial paper market suffered its biggest weekly shrinkage since late August, after credit market turmoil first erupted, the Federal Reserve reported on Thursday.

The overall U.S. commercial paper sector shrank $54.7 billion to a total $1.784 trillion outstanding in the week ended Dec. 19; a
development that was likely to increase concerns that strains in short term lending markets are intensifying at year end.

“The data are likely to add to anxieties about credit conditions,” wrote Tony Crescenzi, chief bond market strategist, Miller, Tabak & Co. in New York in an email note.

The U.S. asset-backed commercial paper market, which has been hard hit by its exposure to subprime mortgage securities gone bad in the U.S. housing slide, shrank for a 19th straight week.

The asset-backed commercial paper segment, which had once helped to fuel the housing boom, fell $27.5 billion to $763.5 billion following last week’s $10.3 billion fall. The size of the ABCP market is the smallest since August 2005.

Unsecured commercial paper issuance by financial firms contracted by $28.6 billion the week ended of Dec. 19, a reversal from the $9.0 billion rise in the previous week.

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