Baton Rouge: The Louisiana Department of the Treasury awarded $40.5 million in much-needed capital to 13 community banks using an online auction of certificates of deposit (CD), according to State Treasurer John Kennedy.
“The state has always relied on CDs as a stable, low-risk investment,” said Treasurer Kennedy. “We use an online auction to get the best possible price on CDs while at the same time providing liquidity to Louisiana banks. Local banks all across the state will have more cash available for businesses and individual customers. This results in more money moving into our communities through small business and consumer loans.”
Using BidLouisiana.com, the Treasury awarded cash to winning banks with the highest bids in exchange for CDs. Each bank’s bid consists of the amount of money it wants and the interest rate it is willing to pay.
The state has been using BidLouisiana to auction CDs online since April 2001, and since this time, 85 participating banks have submitted 3,319 bids for more than $3.9 billion. Over the past 12 years, these banks have won 830 bids totaling more than $2.5 billion. Since the inception of the program, BidLouisiana has grossed the state nearly $1.1 million in additional earnings.
By law, the Treasury may competitively bid up to 50 percent of state funds available for investment in CDs. The next BidLouisiana auction will be held July 16, 2013. For more information about BidLouisiana, visit the Louisiana Department of the Treasury’s website at: https://www.bidlouisiana.com/cd/