Other German Government securities
Promissory notes are concluded at individually agreed condition with interested financial institutions.
Promissory notes ("Schuldscheine") are taken out in response to demand from financial institutions, insurance companies and other institutional investors if this form of borrowing offers a financing advantage for the Federal Government. However, borrowing via promissory notes has been modest in recent years, falling sharply from € 73 bn of overall borrowing between the start of the millennium and 2010 to around € 12 bn and since then decreased slightly to a level of slightly more than € 6 bn at the end of 2020.
Promissory notes are eligible as collateral for Eurosystem credit operations (ECB eligible assets). In order to ensure that all outstanding promissory notes maintain their ECB eligibility after the guideline (EU) 2016/2298 of the ECB will take effect, the Federal Republic of Germany waived its rights to offset claims against the Deutsche Bundesbank in connection with the promissory notes. In addition, the contractual terms for any future promissory notes have been modified as well in order to make sure that the criteria for ECB eligibility are met.