Central bank and PIK notes: Difference between pages

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(CB).
Debt instruments based on non-cash payment of interest coupons.


A bank which acts as the bank for a government and the other banks in a country or economic area.  
Interest is usually recognised by an increase in the amount of principal owed by the borrower.


Central banks are sometimes known as 'reserve' banks.


PIKs are generally either unsecured loans or deeply subordinated securities ranking just before equity in the capital structure.


The central bank in the UK is the Bank of England.  
This means that, in the event of a bankruptcy, PIKs are the last debts to be repaid, making them a high risk instrument for lenders and investors.  


In the euro area (informally the Eurozone or [[Euro zone]]), it is the European Central Bank.
In order to compensate lenders for the risk, PIKs have to offer significantly enhanced rates of return to investors.
 
In the United States, it is the [[Federal Reserve System]].
 
In Australia, it is the Reserve Bank of Australia.




== See also ==
== See also ==
* [[Bank of England]]
* [[Coupon]]
* [[Bank for International Settlements]]
* [[Equity]]
* [[Bank supervision]]
* [[Interest]]
* [[Banque de France]]
* [[Notes]]
* [[Bundesbank]]
* [[Payment in kind]]
* [[CBE]]
* [[Principal]]
* [[CBN]]
* [[Secured debt]]
* [[Central bank digital currency]]  (CBDC)
* [[Subordinated debt]]
* [[Central bank independence]]
* [[Unsecured debt]]
* [[Central bank money]]
* [[Central Bank of the Republic of China]]
* [[Central bank public goods]]
* [[Central bank reporting]]
* [[Central bank reserves]]
* [[De Nederlandsche Bank]]
* [[Digital public money]]
* [[Direct participant in an IFTS]]
* [[euro zone]]
* [[European Central Bank]]  (ECB)
* [[Eurosystem]]
* [[Federal Reserve Bank]]
* [[Federal Reserve System]]
* [[Hong Kong Monetary Authority]]
* [[Institute of International Finance]]
* [[Lender of last resort]]
* [[Market maker of last resort]]
* [[Monetary authority]]
* [[Monetary Authority of Singapore]]
* [[Oversight of payment systems]]
* [[PBOC]]
* [[Quantitative easing ]]
* [[RBI]]
* [[Reserve Bank of Australia]]  (RBA)
* [[Reserves]]
* [[Reserves account]]
* [[Reserve currency]]
* [[Riksbank]]
* [[Swiss National Bank]]
* [[World Bank]]
 
[[Category:Long_term_funding]]

Revision as of 14:21, 22 August 2017

Debt instruments based on non-cash payment of interest coupons.

Interest is usually recognised by an increase in the amount of principal owed by the borrower.


PIKs are generally either unsecured loans or deeply subordinated securities ranking just before equity in the capital structure.

This means that, in the event of a bankruptcy, PIKs are the last debts to be repaid, making them a high risk instrument for lenders and investors.

In order to compensate lenders for the risk, PIKs have to offer significantly enhanced rates of return to investors.


See also

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