overseas countries where neither the importer nor the exporter is based in the home country,2 and the storage and shipping of goods between two entities based at home.   2A bankers acceptance created to finance such a transaction is known as a third-par- ty acceptance.     Bankers acceptances are sold on a discounted basis just like Treasury bills and commercial paper. The rate that a bank charges a customer for issuing a bankers acceptance is a function of the rate at which the bank believes it will be able to sell it in the secondary market. A commission is added to this rate. The major investors in bankers acceptances are money market mutual funds and municipal entities. Bankers acceptances have declined in importance in recent years in favor of other forms of financing. Exhibit 6.8 presents the total amount of bankers acceptances outstanding in billions of dollars each year for the period 1980-2000. There are several reasons that account for this decline. First, the rise in financial disintermediation has reduced corpora- tions dependence on bank financing in that they now have access to wider range of funding options (e.g., commercial paper). Second, the vicious circle of low liquidity leads to less issuance and so on. Third, in July 1984, the Federal Reserve discontinued the use of bankers acceptan- ces as collateral for repurchase agreements when conducting open mar- ket operations.3   The Creation of a Bankers Acceptance The most efficient way to explain the creation of a bankers acceptance is by an illustration. The following fictitious parties are involved in this process:     3In the UK markets, a similar confluence of forces has diminished the bank bills mar- ket there.     ■ PCs For Less plc, a firm in London that sells a wide variety of informa- tion appliances; ■ Kameto Ltd., a manufacturer of personal computers based in Japan ■ ABC Bank plc, a clearing bank based in London ■ Samurai Bank, a bank based in Japan ■ Palmerston Bank plc, another bank based in London ■ Adam Smith Investors plc, a money market fund based in Edinburgh   PCs For Less and Kameto Ltd. are preparing to enter into a deal in which PCs For Less will import a consignment of personal computers (PCs) with a transaction value of £1 million. However, Kameto Ltd. is