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What is a bill? What are promissory notes?

Shares, bonds, bills are securities, each of which has its own characteristics. Ordinary shares, for example, give the right to vote at participation in general meeting of shareholders, their owners can receive dividends. Moreover, ordinary shares, as a rule, are higher than those listed, if these securities are quoted on the stock exchange.

A bond is a debt financial instrument that gives the holder the right to receive a nominal value and, in some cases, a coupon in the form of a certain percentage of the nominal value. For those companies that issue bonds, they are analogous to a loan. For those who buy them - the opportunity to earn on coupon payments, which sometimes exceed the interest on bank deposits. Shares and bonds are issued usually in uncertificated form, in the form of notes on accounts, and are issued securities.

When experts talk about "What is a bill?", They point out its special nature. It is an non-issue debt security and is a duly documented paper document stating that the drawer is obligated to pay the specified amount (a simple bill) without any conditions . These securities are often issued on special forms, which are printed in print shops that have permission to do so. To protect against forgery, these forms have at least special paper, watermarks, polymer threads, microtext. Large borrowers issue securities with a unique design and additional degrees of protection.

In addition to simple, there is also a transferable version of this obligation. What is a promissory note issued in this form? It presupposes the existence of an order (proposal) from the person who issues the security to the payer about the payment to the owner of a certain amount at the set time. In order for such a financial instrument to be safely addressed in the market, the drawer should have a reputation as a reliable "borrower", which fulfills its obligations. Sometimes, in order to increase the attractiveness of the person issuing these obligations, they enter into a general agreement or a separate agreement (for example, with a credit institution), on which bills of exchange are issued. This operation means that the bank must repay the debt of the person liable for this security.

Perhaps, some will be interested to know what a bill is from a historical point of view. This document appeared in Italy around the 12th century. The country was the center of trade, merchants from all over the world came here with their coins. A variety of currencies led to the need for money changers. They took some bribes for the operations and recorded the transaction in their books, which at that time was equated with the notarization. With the increase in trade turnover, it was dangerous to carry money from one city to another. Therefore, the businessmen gave money to the money changer, he made a note in the book, repeated it on a separate sheet that could be presented to another banker. So there was a transferable version of the financial instrument.

What is a bill for the financial system of Russia? In the pre-perestroika period, the circulation of these securities was mainly of a foreign economic nature. With the advent of market relations, promissory notes appeared. In the early 90's they were not spread due to high inflation, a recession in the economy. Good borrowers of this plan appeared only in 1994-95. In the face of large companies and banks. After the 1998 crisis , promissory notes served as an instrument that supported the liquidity of the financial system. Currently, they are used universally, along with other assets for various settlement transactions and profit.

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