Float (money supply)

Float ( engl. "float" ) is in cashless payment transactions of credit institutions created by a postal delivery time and processing time when accounting records time lag between the time of credit and debit time, the same payment transaction.

History

Under the anglicism is understood that as long as bank deposits remain on accounts until issued by company or individual checks will be charged in the English-speaking world the same circumstance. Floats of this type were first discussed in the U.S., where the check payment is popular and by the size of the country sending a check took many days to the recipient. Floats are favored next to this aspect of time by high credit interest when it took two to seven days, until an issued check was debited from the debtor. After September 11, 2001 Floats were particularly high in the U.S. because the masses were not transported from unprocessed checks due to disturbances of aviation. Floats were the 21st Century Act (or Check 21 Act ) as of October 2004 the "Check Clearing " reduced because the banks now exchange electronic copies and not only because of the book original receipts.

The existing in Germany bank networks ( the savings bank sector with the central giro institutions, the cooperative sector with people banks and Raiffeisen banks and the cooperative centers) have payment amounts held as long as possible in their own banking network, to hereby be able to generate interest-bearing float during the Post period of the documents. The processing of payment transactions in its own branch or banking network provides, in principle, represents a saving of central bank money, while the use of foreign bank networks provides a loss.

Species

We distinguish the active and passive float and the positive or negative float.

• The active and passive float refers to the record of a payment transaction. It is the balance sheet at "floating settlements ," by which the counterparts of such payments are to be understood within a credit institution, of which the disclosure date, either the credit or only the load could be posted to the customer accounts. The active float arises in checks, drafts or direct debits in the Direct Debit or debit order process ( so-called collection documents ). The amounts are first credited to the account of the Holder, but charged to the account of the drawee or payer at the same time not. The active float causes the switched banks costs keep the necessary liquidity.

• The positive and negative float is connected with the value date of the payment process. It arises whenever the booking date and value date of a payment transaction are not identical. Here, the positive float is the interest income arising to the Bank from the time difference between the value date even account debit the debtor and the value date even credit the payee. A negative float arises when check deposits at the value date even earlier than the credit value date even load the drawee.

Economic impact

The German Bundesbank speaks of " suspense items in the central banking system " when payments on it are routed and fluctuations occur in the payment transaction volumes. Banks and large corporations can take advantage of float effects consciously in their favor, if they release the active float to other participants (such as the Central Bank) roll off and use the passive float for itself. This is done by quickly publish collection documents (checks, bills, direct debits ) from their own giro network and keep credit amounts as long as possible in their own banking network. In May 1991, the active float of the Bundesbank ( an interest-free loan from credit institutions ) in the peak reached DM 26.5 billion, it is gone over for collection, with same day Werstellung and thus to lead float freely through their network.

The payments rhythm of an economy also affects the float. Large payment dates ( such as salary, rent and tax payments ) can be purchased at month's end with banks high liquidity stocks (passive float) or liquidity requirements (active float ) that can contribute to undesirable consequences on the money market. Therefore, the float is considered a technical element in the money supply.

Floats today

Floats of this nature are hardly any. On the one hand, cashless payments is predominantly paperless, so that mail delivery times omitted and processing times ( since November 2007) and SEPA are minimized (since January 2008) by payment systems such as TARGET2. Both systems are real time systems, in which credit and debit entry - even across institutions - take place simultaneously and thus active / passive Floats are technically excluded. SEPA has since February 2014 abolished the float direct debits, and reduced him to transfer funds to a bank working day.

On the other hand, both the execution time and the value of equality practice at financial institutions are restricted by law. Since November 2009, there are maximum execution time limits for transfers. Execution time is the period between the date of receipt of a payment order and its final accounting to the beneficiary bank. According to § 675s Civil Code, the following deadlines apply:

From the above time limits may in general not be derogated from to the detriment of the customer ( § 675e paragraph 1 BGB, to the exceptions see § 675e paragraph 2, sentence 2, paragraph 3 and 4 BGB).

In terms of value dating to note is § 675T Civil Code, according to which for transfers within the same institution, the payments are to be posted immediately upon receipt and must be the value date the same day as the payment is received. It can be assumed that the posting of a credit on the following business day to the input is still permitted. The legal text draws on the jurisprudence of the Federal Court for value for incoming transfers. The Supreme Court had made it clear that the credit, even if they are made ​​in arrears, shall be such that the value position of the received amount to the account of the client is done with the date of the day on which the amount has been made ​​available to the lending institution. Only with companies may take a different value date agreement for cash payments, the beneficiary financial institution, as referred to in the legislation to consumers.

For the calculation of time limits, the so-called business days are crucial. These are the days when all of the execution of the transfer involved the necessary for this operation entertain ( § 675n BGB). Saturdays, Sundays and public holidays and days on which banks are not open their switches (bank holidays) are not business days.

Credit

Floats are here the period between the date of card usage and account debit the Cardholder. When credit cards are often floats up to a maximum of 30 days possible. With the debit card, there is a monthly statement in the batch card, the cardholder will be debited immediately after payment. For long floats credit cards to meet their name because the cardholder receives a "silent " trade credit by having the goods or services related that he did not immediately settle by cash payment.