CP and CDs markets: a primer

Matteo Aquilina, Andreas Schrimpf and Karamfil Todorov

BIS Quarterly Review, 2023

Abstract: Commercial paper (CP) and certificates of deposits (CDs) are important short-term funding instruments for both financial and non-financial entities. We describe the origins and evolution of these markets in major jurisdictions. 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. 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. 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.

JEL-codes: G15 G23 G28 (search for similar items in EconPapers)
Date: 2023
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