Show Summary Details

Quick Reference

The conversion of government debt from short-term forms, or bills, to long-term forms, or bonds. This is regarded as a form of monetary policy, since bills are more liquid than bonds, and form part of the banks' liquid reserves, whereas bonds do not. Funding tends to raise long-term interest rates, as bonds have to be sold, and lower short-term interest rates, as bills become scarcer.

Subjects: Economics.

Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.