Commercial Paper Tops $1 Trln

Short-term corporate borrowing in U.S. hits highest level this year as investors buy financial company paper.

The market for corporate borrowing via commercial paper increased to more than $1 trillion outstanding for the first time this year, as investors bought financial institutions’ short-term IOUs even as concern mounts that Europe’s fiscal and currency turmoil may spread.

The seasonally adjusted amount of U.S. commercial paper rose $14.9 billion to $1.009 trillion in the week ended yesterday, the Federal Reserve said today on its website. That’s the highest level since $1.03 trillion on Sept. 21, while the fourth straight weekly increase is the longest streak since the period ended Feb. 8.


Investors are buying short-term obligations from financial institutions because government backing supports many big banks, Simons said. “The banking system is over-reserved and over-protected,” he said.

Page 1 of 2

Copyright 2016 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


Advertisement. Closing in 15 seconds.