Word: borrowings
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Dates: during 1970-1979
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Commercial paper is simply a written promise to pay issued by a company that wants to borrow money for a short period (usually 90 days, never longer than nine months) and generally bought by another corporation that has some spare cash to lend. The issuer need not register with the Securities and Exchange Commission, give the buyer a prospectus or back the promise with collateral. His word is his bond...
...years ago, commercial paper was issued mostly by finance companies that wanted to raise money to relend to consumers. But when money became hard to borrow, big industrial corporations stepped up their marketing of paper through Wall Street brokerage houses as a way to raise otherwise unobtainable cash. Since 1965, the amount of commercial paper outstanding has more than quadrupled to $39.7 billion. At present, $1 of commercial paper is outstanding for every $2 of business loans by large commercial banks. Last year there was a $12 billion increase in commercial paper and a $15 billion rise in bank loans...
...establish a Securities Investor Protection Corp. (abbreviated SIPC and pronounced sipic) that would insure each investor's account for as much as $50,-000. SIPC would be empowered to raise an initial fund of $75 million, and eventually $150 million, from brokers. In a pinch, it could also borrow up to $1 billion from the Treasury to pay off customers of insolvent brokers; it would repay the loans by assessing solvent brokers...
...kind of Homestead Act that would make stock, rather than land, available to people who lack the cash or credit to buy it. He envisages creation of a federal agency to insure "capital diffusion loans," much as the Federal Housing Administration insures mortgage loans. He would empower banks to borrow funds directly from the Federal Reserve for such lending...
...reserve fund as an initial step toward a common currency. The directors could make collective decisions on how many dollars to accept in the European reserve fund and on the management of any revaluations. They could also impose joint restrictions on the amount of Eurodollars that U.S. banks could borrow. That would hurt money-short U.S. businesses by cutting down the supply of lendable funds in America. In the long run, a common European currency would reduce the world's dependency on the dollar by introducing a potent rival in the exchange markets...