Source: FRED: DCPF3M, DCPN3M (Computed: financial minus nonfinancial CP)
Data through: Oct 13, 2026 · updated Oct 15 · Updates: Daily (business days; published for dates when both legs trade)
WThe three bars show the last 3 weeks for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
Historical context: Currently in the 9th percentile — near historically low/favorable levels.
What this means right now: Normal state: money markets see no meaningful difference between bank and industrial credit at the 90-day horizon. The financial system's shortest-term funding is unstressed.
CP Financial–Nonfinancial Spread (3-Month) — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Oct 2026
−0.01%
Healthy reading
Sep 2026
−0.01%
Healthy reading
Aug 2026
0.16%
Within normal range
Jul 2026
0.12%
Within normal range
Jun 2026
0.09%
Within normal range
May 2026
−0.01%
Healthy reading
Month-end readings of the same series the chart shows, from cp_fin_nonfin_spread. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the CP Fin–Nonfin Spread?
This spread is the 90-day AA financial commercial paper rate (DCPF3M) minus the 90-day AA non-financial commercial paper rate (DCPN3M). It is the extra yield money-market investors demand to lend to a bank or finance company rather than an industrial firm of the same top credit rating, for the same three months.
Under normal conditions the two rates are nearly identical: the spread's median since 1997 is 3 basis points. Because both legs are AA-rated 90-day paper, the policy rate, the T-bill curve and general credit conditions cancel out. What remains is whether the financial sector specifically is seen as riskier than other companies.
That is a narrower question than the CP–Tbill spread, which measures funding stress against the risk-free rate. In October 2008 this spread reached 2.00 points, as money funds still lent to industrial issuers but demanded a large premium from banks. In March 2020 it went the other way, to −1.22 points, as non-financial paper came under more pressure than bank paper.
How We Color-Code the CP Fin–Nonfin Spread
Our heatmap colors this indicator against historically significant thresholds:
Below −0.05%
Inverted — financial paper funds cheaper than industrial paper, about 1 day in 51 since 1997 (97 days); stress, if any, sits outside the banks
−0.05% – 0.05%
Normal — the two fund at about the same rate, the usual state: about 2 days in 3 since 1997 (67%)
0.05% – 0.25%
Mild premium — financial paper paying 5 to 25 basis points more, about 1 day in 4 since 1997 (27%); money-fund rules and issuance mix can hold it here without any credit stress
0.25% – 0.75%
Clear financial-sector premium — about 1 day in 25 since 1997 (4%), in nine periods; only one of them, 2007–09, was a banking crisis
Above 0.75%
Financial-sector funding crisis — 34 days since 1997, all in the 2007–09 crisis but one in March 2020 (October 2008: 2.00 points)
Historical Extremes — What Happened Next?
When this indicator reaches extreme levels, history shows consistent patterns:
Oct 8, 2008Lehman Aftermath Peak
2.00%
The record, three weeks after Lehman failed and the Reserve Primary Fund broke the buck. It came the day after the Fed announced its commercial-paper facility.
Jan 30, 2009Second Banking-Panic Wave
1.88%
The spread spiked again as fears over bank solvency peaked in early 2009. It did not stay below 0.25 until May 2009.
Mar 19, 2020COVID Inversion
−1.22%
The all-time low: in March 2020 non-financial paper came under more pressure than bank paper, the mirror image of 2008. A funding crisis can sit outside the financial sector.
Nov 9, 2001Post-9/11 / Enron Autumn
0.13%
Through the 2001 recession, 9/11 and Enron the spread stayed between −0.06 and +0.13 points. That recession had no banking panic, and the spread barely moved.
May 27, 2016Money-Fund Reform Distortion
0.14%
A money-fund rule change, not credit, held the spread above normal through 2016: it ranged from −0.05 to 0.45 that year. Prime funds, the main buyers of financial paper, shrank as money moved into government funds.
Mar 24, 2020COVID Financial-Leg Peak
0.94%
Days after the inversion, the financial leg caught up as the dash for cash spread: the spread swung 2.2 points in three trading days. Only October 2008 saw a swing as large.
Frequently Asked Questions
How is this different from the CP–Tbill spread?
The CP–Tbill spread compares financial CP to the risk-free rate, so it measures general funding stress plus any rush into T-bills. This spread compares financial CP to equally rated non-financial CP, so the risk-free rate and general credit conditions cancel, leaving whether the financial sector specifically is being charged extra. In 2008 both rose sharply; in 2020 the CP–Tbill spread spiked while this one inverted, showing that 2020 was not a banking crisis.
Who actually issues each type of paper?
Financial CP: bank holding companies, broker-dealer parents, and captive finance arms (think GE Capital historically). Nonfinancial CP: large industrial and consumer corporations funding payroll and inventory. The main buyers of both are prime money-market funds — which is why money-fund behavior (2008 panic, 2016 reform, 2020 outflows) is the transmission mechanism for this spread.
Why did the spread go deeply NEGATIVE in March 2020?
Because that crisis reversed the usual ranking: investors fled non-financial paper while bank paper held up. The spread hit −1.22 points on March 19, 2020. Days later the dash for cash spread and the financial leg rose too.
Can the spread move for non-credit reasons?
Yes, and 2016 is the clearest case. A money-fund rule change moved money out of prime funds, the main buyers of financial paper, and the spread reached 0.45 that year with no bank-credit stress. It has also risen above 0.25 again and again without a banking crisis, as from March to November 2022.
How are this page's colour levels set?
Zero means banks and industrial firms fund at the same rate, and the levels mark how much more financial issuers pay. From −0.05% to 0.05% is normal: the two fund at about the same rate. Below −0.05% is inverted, financial paper funding cheaper, with any stress sitting outside the banks. From 0.05% to 0.25% is a mild premium, ordinary funding noise that money-fund rules and issuance mix can produce without credit stress. Above 0.25% is a clear financial-sector premium, and above 0.75% is a financial-sector funding crisis, money funds refusing bank paper. They are fixed levels, set in July 2026 with the series' whole history in view, and they do not move as new data arrives. A given reading gets the same colour in 2008 as today, so a change of colour is a change in what money markets charge the financial sector, never in the yardstick.