(Adds details, background)
NEW YORK, Sept 15 The amount of U.S. commercial
paper shrank to its lowest level in nearly a year as a result of
reduced demand for short-term bank debt from U.S. money market
funds, according to Federal Reserve data released on Thursday.
U.S. seasonally adjusted commercial paper outstanding in the
week ended on Wednesday fell $19 billion to $963.7 billion,
which was the lowest since $957.84 billion in the week of Sept.
This type of short-term corporate IOU has contracted by 14
percent since May as some prime money market funds, which had
been major holders of commercial paper, have changed over to
hold only government bonds.
The move will exempt these funds from U.S. Securities and
Exchange Commission rules that take effect on Oct. 14.
These rules are the final phase of U.S. money fund reform
that is intended to safeguard a sector that was rattled by the
collapse of Lehman Brothers during the global credit crunch in
Meanwhile, non-seasonally adjusted commercial paper
outstanding, which some analysts consider a more reliable
reading than the seasonally adjusted one since it has been
distorted by the financial crisis, fell $8.6 billion to $985.3
billion. The latest non-seasonally adjusted figure was the
lowest since $971.8 billion in the week of Dec. 30.
Assets of prime institutional money funds fell $36.45
billion in the week ended Sept. 13 to $469 billion, the ninth
consecutive weekly decline, according to iMoneyNet data
published on Wednesday.
(Reporting by Richard Leong; Editing by Lisa Von Ahn)