Money market paper issuance declines
During the fourth quarter of 2013, gross issuance of money market paper amounted to EUR 70 billion(37% less than in the preceding quarter). The drop in issues was caused in part by lower refinancing needs, as evidenced by EUR 98 billion in redemptions of money market paper. Also, the banking industry continued to reduce the amount of outstanding of short-term debt securities so as to further reduce its balance sheet. Given new legislation, banks extended the average duration of their outstanding debt, in line with moves to reduce their balance sheets. Owing to moderate money market paper issuance by banks (EUR 22 billion, see figure 1), outstanding issues of such paper declined by EUR 12 billion to EUR 76 billion, the lowest level since mid-2010.
The Dutch central government also issued less money market paper (EUR 28 billion, or 46% less than in the previous quarter). The outstanding amount of money market paper issued by the Dutch Treasury thus declined by EUR 13 billion to EUR 26 billion, the lowest level since the beginning of 2008 (and in line with the Dutch State Treasury Agency's target level of circa EUR 30 billion). With the decline of issues by banks and general government, the outstanding amount of Dutch short-term debt securities fell to EUR 122 billion (-19% Q-o-Q), the lowest level since mid-2008.
In the euro area, the outstanding level of money market paper also declined, by EUR 123 billion (-9% Q-o-Q) to EUR 1,310 billion, the lowest level since the third quarter of 2007.
Money market paper issuance by Dutch banks