The long and the short of it… (developments in the sterling commercial paper money markets) (column)

THE LONG AND THE SHORT OF IT . . .

The first development – at the short-term end – was the opening of the sterling commercial paper (CP) market. That was announced by the Bank of England (BoE) on April 29. Under BoE rules, sterling CP consists of promissory notes with maturities of between seven days and a year. CP is usually issued at a discount to face value, but it can be interest-bearing. Sterling CP is an extension of the move made by the BoE in March last year to allow issues by UK companies of sterling domestic bonds with maturities of between one and five years.