In: Economics
Explain Eurocommerical papers.
Eurocommercial paper is a type of loan which is short term or a form of unsecured short term loan which is issued by a corporation in the international money market or by a bank. Eurocommercial papers are different from the domestic currency of the market where paper, bond, debt security is issued where eurocommercial papers are denominated in a currency. The Eurocommercial paper works to be an attractive short term financing tool for firms that wish to reduce risk of foreign market or ECP issuers include companies, government public entities and financial institutions with sovereign risk. Financial institutions and corporate groups with international operations often centerlize their group cash management. And that group cash management are centralize through a financial subsidiary that issues Eurocommercial papers.