discount house

In the British money market, discount houses are specialist banks with a long history, originating from bill brokers in the early 19th century. Initially, they facilitated the market for inland commercial bills, enabling industrial areas to access savings from agricultural regions. Over time, many bill brokers began borrowing money to purchase and hold these bills, evolving into the first discount houses.1

Their primary assets have varied, including commercial bills, treasury bills, and short-dated government bonds. More recently, certificates of deposit have become a significant asset. Discount houses play a crucial role in the financial system by investing funds borrowed from banks into short-term assets. They also act as market makers for certain financial instruments and have the right to borrow from the Bank of England as a lender of last resort.1

A discount house can also refer to a firm that sells branded goods at prices below the list price.2