Das Baugewerbe in der Volks-, Berufs- und Betriebszählung von 1925

The work of the Stock Exchange

Bibliographic data

Monograph

Identifikator:: 1753210836

URN:: urn:nbn:de:zbw-retromon-128414

Document type:: Monograph

Author:: Nogaro, Bertrand http://d-nb.info/gnd/117039713

Title:: Modern monetary systems

Place of publication:: London

Publisher:: King

Year of publication:: 1927

Scope:: XII, 236 S.

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Modern monetary systems and their operation

Collection:: Economics Books

296 THE WORK OF THE STOCK EXCHANGE consulting leading and typical lenders, borrowers and money experts. The initiative in establishing the renewal rate is taken by the Executive Committee of the Stock Clearing Corporation; after considering available statistics and circum- stances relating to current money-market conditions, and ob- taining the views of prominent and representative borrowers and lenders, this Committee fixes the renewal rate. There is usually a considerable body of facts to guide very accurately the establishment of the renewal rate. The condition and rates of the call money market the preceding day, the surplus funds (if any) at its close, and other important factors are taken into careful consideration. The renewal rate is made shortly after 11:30 A.M., posted near the money desk on the Stock Exchange and printed on the tape. Since the renewal rate is merely an expression of expert opinion, and not in any way binding upon either borrowers or lenders, only to the extent that it is satisfactory to these lenders and borrowers are loans actually renewed. It often happens that a lender will refuse to renew his loans at what may seem to him too low a renewal rate; he will therefore call his loans, and endeavor to put his money out later on at a higher rate. Similarly, borrowers may pay off loans in the belief that they can reborrow later at rates lower than the posted renewal rate. But so delicately and expertly is the suggested rate for renewals made that it is usually recogfized as a very accurate indication of the fundamental conditions of supply and demand, and therefore as a satisfactory basis upon which to renew call loans for at least a single day. Statistics®® show that during the years 1922-29, the average variation between the average of renewal rates and that of new loans made, has amounted to only 0.04 of 1%, and in some years has been as low as 0.005 of 1%. These figures are conclusive proof of the accuracy with which the renewal rate habitually accords with current rates for new loans, which are of course established purely by bar- tering between lenders and borrowers. x See Appendix XIj.

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