WASHINGTON -- The Treasury took just 49 minutes to announce the results of its weekly bill auction yesterday, the first under a new procedure designed to cut down nail-biting on trading desks and save taxpayers' money.
By moving the deadline for non-competitive bids to noon from 1 p.m., the Treasury was able to announce the results of its weekly three- and six-month bill sale at 1:49 p.m. Under the old procedure, the announcement came about 3:15 or later.
Competitive bids from primary dealers remain due at 1 p.m.
If yesterday was any indication, the change will reduce by an hour or more dealers' uncertainty over the success of their bids.
"It's helpful," said a trader at a primary dealer in New York. "It certainly minimizes the amount of anxiety and gives you a little time to trade afterward."
The reduced uncertainty dilutes the risk to dealers' capital, meaning dealers probably will avoid building that risk into their bids, saving the Treasury -- and the taxpayer -- a considerable sum.
"It's a tremendous improvement from even a year ago," said Michael Basham, deputy assistant Treasury secretary for federal finance.
The Treasury Department sold $9.8 billion yesterday in three-month bills at an average discount rate of 7.07 percent, down from 7.12 percent last week. Another $9.8 billion was sold in six-month bills at an average discount rate of 7.05 percent, down from 7.13 percent last week.
Mr. Basham notes that the auction time was saved at little cost.