ABM 109

BANKING AND FINANCIAL INSTITUTION

Group 4:
Jasmine Go Kathleen Cabigas
Liana Roldan
Questions
1. What are the treasury bills? For what
purpose are they issued?
2. What remedy does a bank
management do to correct temp
financial deficiencies caused by heavy
withdrawals of cash?
Answers
1. Treasury bills (T-bills) are financial instruments with highly
stable marketability and are issued by the Philippine
government on various maturities of up to one year.
Proceeds from the issue of T-bills are used to finance the
budget deficits of the national government. Treasury bills
are issued when the government needs money for a short
period. Only the central government issues these bills, and
the market forces determine the interest on them. This is
the most actively traded in the money market which makes
them the most liquid.
2. One of the remedies is interbank call loans. Using interbank
call loans, a bank low on reserves can borrow money from other
banks who have excess reserves. This will benefit the banks as
interest is charged on the call loans.