Treasury bill

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Treasury Bill

A debt security backed by the full faith and credit of the United States government with a maturity of one year or less. Very commonly, T bills have a maturity of a few weeks to a few months. They are purchased at a discount and then redeemed for par; T bills do not pay interest. For example, an investor may purchase a $5,000 bill for $4,500. While he/she will not earn any coupon payments, he/she will receive $5,000 in no more than a year. They are low-risk, low-return investments. Private investors may purchase T bills in small quantities, but the bulk of the T bill market comes from institutional investors, especially banks. See also: Treasury note, Treasury bond.

Treasury bill

A short-term debt security of the U.S. government that is sold in minimum amounts of $10,000 and multiples of $5,000 above the minimum. Bills with 13-week and 26-week maturities are auctioned each Monday, and 52-week bills are sold every 4 weeks. These obligations, which are very easy to resell, may be purchased through brokers, commercial banks, or directly from the Federal Reserve. Also called T bill. See also bank-discount basis, certificate of indebtedness, Form PD 4633-1.

Treasury bill (T-bill).

Treasury bills are the shortest-term government debt securities.

They are issued with a maturity date of 4, 13, or 26 weeks. The 13- and 26-week bills are sold weekly by competitive auction to institutional investors, and to noncompetitive bidders through Treasury Direct for the same price paid by the competitive bidders.

Treasury bill

a redeemable FINANCIAL SECURITY bearing a three-month redemption date which is issued by the Bank of England. Some Treasury bills are purchased on tap at undisclosed sums by government departments with temporary cash surpluses, but the vast majority are sold at periodic tender auctions to DISCOUNT HOUSES and overseas banks. Treasury bills bear a nominal face value which is repaid in full on redemption, but the price paid for them on issue depends on the outcome of a competitive tender, with discount houses and overseas banks bidding against each other for an allocation. The Treasury bills which are bought by the discount houses are usually then sold (rediscounted) in the DISCOUNT MARKET to other buyers, principally to COMMERCIAL BANKS which hold them as part of their ‘liquidity base’ to support their lending operations. Treasury bills are issued alongside BONDS both to raise finance for the government to cover BUDGET deficits and also as a means of controlling the MONEY SUPPLY and level of INTEREST RATES. See MONETARY POLICY.

Treasury bill

a FINANCIAL SECURITY issued by a country's CENTRAL BANK as a means for the government to borrow money for short periods of time. In the UK, three-month Treasury bills are issued by the BANK OF ENGLAND through the DISCOUNT MARKET. Most Treasury bills are purchased initially by the DISCOUNT HOUSES and then, in the main, sold (rediscounted) principally to the COMMERCIAL BANKS, which hold them as part of their liquidity base to support their lending operations.

Treasury bills constitute a significant part of the commercial banks’ RESERVE ASSET RATIO. Thus, the monetary authorities use Treasury bills to regulate the liquidity base of the banking system in order to control the MONEY SUPPLY. For example, if the authorities wish to expand the money supply, they can issue more Treasury bills, which increases the liquidity base of the banking system and induces a multiple expansion of bank deposits. See also BANK-DEPOSIT CREATION, FUNDING, REPO RATE OF INTEREST, MONETARY POLICY COMMITTEE, PUBLIC-SECTOR BORROWING REQUIREMENT.

References in periodicals archive ?
Banks will take the T-bills to the Bank of Greece's ELA mechanism and fund them with a small haircut.
But its expanded T-bill issues are an important step, bankers say.
Investments in T-Bill futures could be expected over time to have the return on T-Bill futures match the return on T-Bills.
The next section describes the SPF forecasts, naive forecasts, and an augmented SPF (SPF-A) model which relates the SPF forecast errors of the T-bill rate to the SPF forecasts of the CPI inflation and real GDP growth.
Bankers said repo rates could hold at the current level in the immediate future, but the central bank could boost yields on T-bill rates to narrow the difference between the two.
Offered in minimum denominations of $10,000, T-bills are issued at a discount from their face value.
Suppose a company has $Y in AA-quality, floating-rate securities which pay the 13-week T-bill rate plus 70 basis points.
Market Vectors Global Event Long/Short Equity Hedge Fund Beta Index (MVEVEQ) Number of components: 4 Top 3 components: SPDR Barclays Capital 1-3 Month T-Bill (74.
Were the national coffers empty and the Treasury in need of quick cash, the one-year T-bill rate would have similarly jumped 34.
The 183-day T-bill rate fell by 83 basis points to 0.
Monthly T-bill sales are Greece's sole source of market funding.
6% over the 10-yr T-Bill with a 10 year term, 30 year amortization.