This is especially true where there is, in the banking practice, a wide "rediscount market," in which he can sell these bills before maturity if he wishes to get even more liquid assets.
They will feel the need for less reserves, also, with a wider rediscount market.
The bank may rediscount the note of the merchant, giving it its own endorsement, on a 4-1/2% basis.
Power to rediscount commercial paper seems a feeble and hardly relevant weapon against a combination concerned with purchasing securities, and making collateral loans!
A second important practical conclusion relates to the provision in the Federal Reserve Act which forbids Federal Reserve Banks to rediscount stock exchange paper.
I think such a general confidence in the English government has clearly been a factor in the price of Sterling exchange since the balance of trade turned so overwhelmingly against England in the present War.
On the other hand, I do not believe that those who put a banker inside every one of us can prove that their principle has been a complete explanation at any stage of our monetary history.
All that is conceded is that there need not be a physical commodity as the basis of the money.
The miser's love for money is a classical example.
To ask for a rediscount is to ask for accommodation.
Loans from the provincial bank of the district, or more importantly from the central bank of the Empire at which the local bank keeps a current account and with which it may rediscount its paper.
In other words, torediscount its commercial paper would affect a bank's credit.
We always calculate what sum each day will be likely to be withdrawn; besides which we always have a large amount of commercial paper which we could rediscount at the Bank of France at once.
By its means they can, if need be, rediscount their commercial paper, exchange their unmatured assets for actual cash, and secure its still better known credit in place of their own.
Should the bank desire to realize on this paper it could do so by rediscounting it, but such a rediscount would be practically equivalent to a loan to the bank on the strength of its own name.
To make assurance doubly sure, the rediscount of loans secured by stocks and bonds is specifically prohibited.
The bank is always prepared to rediscount for other banks at its official rate, and does a large business from time to time with the colonial and foreign exchange banks who are from the nature of their business always sellers of bills.
Under our French system we consider the commercial paper we keep in the portfolio a cash reserve, as we can rediscount it at the Bank of France.
In this matter, the Board has no power whatever, except that it may require, on the affirmative vote of five members, one Reserve Bank to rediscount paper for others.
To this end they keep funds on deposit there, and regularlyrediscount the paper of their customers when balances need to be replenished.
The proposed Federal Reserve Banks are to hold a part of the reserves of member banks and to rediscount commercial paper, administer exchange accounts, and conduct clearings for them.
The lack of a central bank and of a rediscount market is to a degree compensated by unity of action among the banks.
The above list will hopefully give you a few useful examples demonstrating the appropriate usage of "rediscount" in a variety of sentences. We hope that you will now be able to make sentences using this word.
