Discussion Paper

Innovations in Treasury Debt Instruments

Abstract: On January 31, 2012, the Treasury Borrowing Advisory Committee advised the Secretary of the Treasury that it unanimously supported the issuance of floating-rate notes by the U.S. Treasury. Sovereign issuers are not known as hotbeds of financial innovation, and the introduction of a new sovereign debt instrument is a significant event. This post provides some perspective on the possible issuance of floating-rate notes by reviewing the history of earlier innovations in Treasury debt instruments, including Treasury bills, STRIPS, and TIPS. It concludes that the Treasury has been an infrequent, but nevertheless astute, innovator.

Keywords: floating rate notes; Treasury debt management; Treasury debt instruments;

JEL Classification: G1;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2012-04-09

Number: 20120409