Investors still steering clear of commercial paper

Latest figures from the Fed show another fall in short-term debt market, but decline is slowing.

By Grace Wong, CNNMoney.com staff writer

LONDON (CNNMoney.com) -- Investors shunned a key short-term debt market for a fifth straight week, according to the latest statistics from the Federal Reserve.

The amount of outstanding commercial paper fell by $8.2 billion to $1.92 trillion in the week ended Wednesday. Paper backed by assets like home loans fell by $21.6 billion to $945.1 billion.

Companies and financial institutions rely on commercial paper - which usually matures in about 30 days - to raise money for short periods of time. But the market seized up last month as investors turned away from risk.

This short-term financing market continues to contract, but figures from the Fed show the declines are slowing. The latest $8.2 billion fall is a far cry from the sharp $91.1 billion decline the market saw in the week ended Aug. 15.

While the market appears to be shoring up, it's uncertain whether this stability will be sustained. (Read more about why the commercial paper market matters.)

The outstanding volume of commercial paper has declined by about 13 percent since the end of July, when there was an estimated $2.2 trillion outstanding, with asset-backed paper accounting for slightly more than half of that amount. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.