How often are treasury bills auctioned

Open market policy

is used to regulate interest rates and liquidity in the market. The ECB and the national central banks can operate in the financial markets by buying or selling claims and marketable securities and precious metals permanently (by cash or forward) or under repurchase agreements in common or third-country currencies. The money is, so to speak, "auctioned": the central bank usually specifies the interest rate at which the banks can submit their volume offers, or it specifies the amount that it intends to allocate to the banks that offer the highest interest rates. In Germany these transactions are carried out as so-called »repurchase agreements«, i. H. Purchase of government bonds with a simultaneous repurchase agreement. A purchase increases the bank's liquidity, while a sale reduces liquidity. The open market policy also includes credit transactions with banks and other market participants, whereby sufficient collateral must be provided for the loans. The most important type of open market operation is repo.

Instrument that the central bank uses as part of its policy by buying or selling securities on the open market in its own name. For the Deutsche Bundesbank, the legal basis for these transactions is §§ 15, 21 BBankG. According to § 21 BBankG, the Bundesbank may buy and sell at market rates to regulate the money market on the open market:
- rediscountable exchange material,
- Bills of exchange and treasury notes, bonds and debt register claims of the federal government, the special assets of the federal government or a state;
- bonds admitted to official trading.

In order to ensure at all times that the Bundesbank has the necessary material available for its open market operations, the Federal Government has to hand over treasury bills and non-interest-bearing Treasury notes (mobilization papers) up to the nominal amount of the equalization claims at the request of the Bundesbank in accordance with Section 42 BBankG. In addition, after the aforementioned mobilization papers have been fully circulated, the Federal Government must also hand over Treasury bills and non-interest-bearing Treasury notes (liquidity papers) up to a volume of up to € 8 billion at the request of the Bundesbank.
As part of its open market policy, the Bundesbank also conducts open market transactions on securities with repurchase agreements (securities repurchase agreements) and open market transactions on bills of exchange with repurchase agreements (bills of exchange repurchase agreements (repurchase agreements). The Bundesbank has been increasingly using this variant of open market policy since autumn 1984. On the one hand, it allows the Lombard policy instrument to be substituted and on the other hand allows a more elegant and efficient money market control, which is shown not least in the fact that money market rates have meanwhile oriented themselves towards the pension rate.
The partners in securities repurchase agreements are only credit institutions that are subject to the minimum reserve requirement, with the transactions being offered in the tendering process. In the case of bill repurchase agreements, transactions are only carried out with banks that have been granted rediscount quotas.
The securities repurchase agreements have meanwhile become an instrument of long-term refinancing for the banks.
Open market policy is generally aimed at influencing interest rates (above all on the money market) and the banks' free liquidity reserves (central bank policy). Since the effects of the various open market transactions are very different, an assessment only needs to be made in individual cases against the background of the initial situation and the type and intensity of the measures.

In socialist economics: Central banks, and in future also the European Central Bank (European Monetary Institute), use monetary policy instruments to influence the supply of liquidity on the money market.

In the Federal Republic of Germany, the Bundesbank can buy or sell securities on its own account on the “open” money and capital markets. If it buys from banks, their liquidity increases because the banks receive money for the securities (expansive open market policy); If the Bundesbank sells the securities to banks, the amount of money available decreases (contractionary open market policy).

Important monetary policy instrument within the monetary policy instruments of the central bank. For the ECB fine-tuning instrument (open market policy on the money market). The open market operations of the central bank increase the central bank money supply in the economy, i. H. the monetary base, changed immediately.

Part of monetary policy. To regulate the money market, the Deutsche Bundesbank buys (expansive open market policy) and sells (restrictive open market policy) depending on the requirements of its monetary policy on the "open" market for its own account in exchange for central bank money. In securities transactions on behalf of and for the account of public households, the Bundesbank acts as a fiscal agent; such actions do not count towards open market policy. Participants in the open market business are therefore the Bundesbank on the one hand (buyer or supplier of open market paper) and commercial banks (supplier or buyer) on the other side of the market; It is rare that non-banks are also included in open market operations. The stability bond represents a special case, in which the proceeds of the bond issue are suspended (reinvested) in a government account at the Bundesbank. Open market transactions are carried out on the capital market even more rarely. According to Sections 15 and 21 BBankG, the Bundesbank can use (1) Bundesbank-eligible bills of exchange (Section 19 BBankG), (2) Treasury bills with a term of up to 3 months, the issuer of which is the Federal Government, one of its special assets (Bundesbahn, Federal Post Office) or a federal state, (3) non-interest-bearing treasury notes (cash bonds) with a term of 3, 6, 9, 12 or 24 months, the issuer of which is the federal government, one of its special funds or a federal state; These U-treasures are usually not redeemable before maturity (N-papers) and, as capital market papers (capital market policy), include other bonds admitted to official stock exchange trading in their open market operations in order to regulate the money supply. However, it can also make certain special securities trading agreements with the commercial banks and conclude repo transactions, exchange repurchase transactions, currency swaps and currency repurchase transactions. As far as its monetary policy objectives allow, the Bundesbank also trades federal government bonds or its special funds on its own account to maintain prices, e.g. through support purchases of these securities. Treasury bills and non-interest-bearing treasury notes (U-Schätze) are to be made available to the Bundesbank by the federal government as so-called mobilization papers up to a nominal amount of the equalization claim (currency reform) against the federal government to which it is entitled (currency reform) in the amount of DM 8.1 billion (§42 BBankG). If the volume of mobilization papers is not sufficient to pursue certain monetary policy goals, the Bundesbank can request further treasury bills and U-treasures from the federal government up to a maximum amount of DM 8 billion as so-called liquidity papers (Section 29 Stability Act, Sections 42, 42a BBankG). The Bundesbank either uses the • interest rate procedure, in which only the tax rates for the open market papers and not the redemption rates are set (these are communicated on request; the quantity of open market papers offered is not fixed), or via • the tender procedure ( Tendering process), in which the quantity of open market securities offered is determined and sold at the highest bidder. The way in which the open market policy works can be seen in the balance sheets of the market partners under consideration as well as in the refinancing policy in that the monetary base (central bank money) owned by the commercial banks and thus their potential for money supply are varied. Literature: Borchert, M., Geld und Kredit, fcine Introduction to Monetary Theory and Monetary Policy, 2nd edition, Munich 1992. Dickertmann, D./Siedenberg, A., Instrumentarium der Geldpolitik, 4th edition, Düsseldorf 1984.

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