Short Term Business Assets

The same as in the case of promissory notes and treasury bills, the short-term business assets are also issued on the money markets.

So, the government is not the only institution that is capable of issuing on these markets although compared with their emissions, the volume of the short-term business assets are more reduced.

The most important short-term business assts are:

• - Promissory business notes (the commercial paper in U.S.A.)
• - Business bills (similar to the bankers acceptances in U.S.A.)

Business Promissory Notes
This type of debt was created in 1920 due to the impulse of the American Company General Motors and its development has been important in the U.S.A., Canada and Great Britain.

It is a short-term type of debt that incorporates a payment obligation and issued by a company (usually non financial) with a clause at the order. Its members trade them in the stock exchange markets, but they can also be acquired by means of mediating financial institutions. The role of these institutions (banks, saving banks, mediating associations on the money markets) is, generally, that of finding interested clients to invest in promissory notes and to offer a liquidity guarantee at their maturity. The guarantee is bases on the concession to the issuing company of a credit line on which the promissory notes are charged on the expiration date date. In case the company suffers important problems of liquidity this credit line will be cancelled so the payment guarantee is only offered by the solvency of the own issuing company.

As with the case of private debentures, occasionally they are also included within this category and not only are included the securities issued by private companies but also those issued by public companies and, even non-governmental public institutions as are the municipal governments and autonomous communities.