Federal Financing Bank: Estimated Effects on the Maturity Composition of the Federal Debt

摘要

Over the past 12 years an important institutional change has occurred in the way the federal government borrows from the public. In 1973, the Federal Financing Bank (FFB) was created by the Congress for the purpose of consolidating the borrowing activities of various federal agencies. Federal agencies with borrowing needs can now borrow from the FFB rather than directly from the public. The FFB, in turn, borrows from the U.S. Treasury. As a result, the maturity of the federal debt has changed in ways that cannot be observed from officially published data. The authors present estimates of these maturity changes and explain how the estimates were made. Changes in the maturity composition of federal debt may cause changes in 'real' economic variables, e.g., interest rates, investment, and prices. The report indicates that using the FFB for intragovernment borrowing has shortened the maturity of outstanding federal debt held by the public.