domestic banks

domestic banks issued only 80 percent of the outstanding NCDs; and by 1989, 60 percent. Foreign commercial banks, savings and loan associations, and mutual savings banks make up the rest of the market.
c. Finance companies are the primary issuers of commercial paper, with a total of approximately 70 percent of the market in 1969 and currently 60 percent. Domestic nonfinancial firms issue roughly 20 percent, foreign firms about 15 percent, and commercial bank holding companies less than 10 percent.
4. a. A repurchase agreement is an agreement between buyer and seller in the sale of securities to reverse the transaction in the future at a specified date and price. It is, in essence, a collateralized loan.
b. To ensure the integrity of the transaction, the buyer of the securities should take the following measures:
i. Execute clear and complete “master” repurchase agreements covering all terms of the transactions.
ii. Research the financial strength of the other party involved.
iii. Obtain control of the securities to be used as collateral.
iv. Evaluate the underlying securities to ascertain adequacy of the collateral.
5. a. A discount house is a financial institution
that acts as an intermediary between the government and a country’s banking system.
b. Discount houses operate in the United Kingdom
and Singapore.
c. The functions of discount houses are to
facilitate a strong market in government
securities, to help the commercial banking
system to adjust liquidity levels as needed,
and to help the monetary authorities to
implement monetary policy.
6. Government securities dealers are closely involved with the U.S. government in the issuance of Treasury securities. They purchase Treasury