Treasurer Kennedy Says State is Opening Up Treasury to Banks with Liquidity Needs

BATON ROUGE, LA – The State Treasury is working to increase economic development statewide by reaching out to Louisiana banks with cash flow needs and offering money in return for certificates of deposit (CDs), according to State Treasurer John Kennedy.

Were opening up the State Treasury to local banks that need cash for lending purposes, and buying CDs is a great way we can do that, said Treasurer Kennedy. CDs are a stable way the state can diversify its investments, make money, and stimulate growth in areas that need it the most. By law, the Treasury can competitively bid out 20 percent of state funds determined available for CD investment.

Using an Internet auction, the Treasury awards cash to the bank with the highest bid in exchange for a CD. A bank uses the cash and lends it out to customers, and the Treasury’s CD, in return, is like a promissory note the bank pays back over time with interest. CDs are really a win-win situation for both the state and banks, said Treasurer Kennedy. The state invests in CDs because they are widely accepted fixed income investments that are relatively safe. Banks win because they get cash up front they can lend out to individuals or use in other ways, ultimately for the benefit of the community where they’re located.

Louisiana banks can access CDs using the Treasury’s online competitive auction, located at www.BidLouisiana.com. BidLouisiana holds quarterly auctions each year and has placed a total of $164.2 million in CDs with 82 Louisiana banks. The next BidLouisiana web site auction is scheduled for January 21, 2003. Information on CDs can also be obtained by contacting the Treasury directly at (225) 342-0010.

Contact:
Sarah Mulhearn
(225) 342-0012