...The money market is a sector of the capital market where short-term obligations such as Treasury bills, commercial paper and bankers' acceptances are bought and sold. ... Money Markets: Basics
The money market is the global financial market for short-term borrowing and lending. It provides short-term liquid funding for the Global Financial System (GFS).
GFS (History, Istitutions).
The money market is a sector of the capital market where short-term obligations such as Treasury bills, commercial paper and bankers' acceptances are bought and sold. »...continued below
Statistical Supplement to the Federal Reserve Bulletin - published monthly
? Latest Bulletin
Daily Repo rates
? BBA LIBOR
»...The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short term financial instruments commonly called "paper". This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity.
Repos (RPs or Repurchase agreements) are financial instruments used in the money markets and capital markets. A more accurate and descriptive term is Sale and Repurchase Agreement, since what occurs is that the cash receiver (seller) sells securities now, in return for cash, to the cash provider (buyer), and agrees to repurchase those securities from the buyer for a greater sum of cash at some later date, that greater sum being all of the cash lent and some extra cash (constituting interest, known as the repo rate). There is little that prevents any security from being employed in a repo; so, Treasury or Government bills, corporate and Treasury / Government bonds, and stocks / shares, may all be used as securities involved in a repo.
...more (US Fed use of Repos)
....Model of the ECB's new headquarters...
Fed Board of Governors of the Federal Reserve, Washington, D.C. (USA)
Europe ECB European Central Bank (ECB) Frankfurt/Germany (EU)
The core money market consists of banks borrowing and lending to each other, using commercial paper, repurchase agreements and similar instruments. These instruments are often benchmarked to LIBOR (London Interbank Offered Rate). LIBOR is published by the British Bankers Association (BBA) shortly after 11:00 each day, London time, and is a filtered average of inter-bank deposit rates offered by designated contributor banks, for maturities ranging from overnight to one year.
Books: 'Money Markets'
Common Money Market Instruments
Bankers' acceptance - A draft issued by a bank that will be accepted for payment, effectively the same as a cashier's check.
Certificate of deposit - A time deposit at a bank with a specific maturity date.
Repurchase agreements - Short-term loans—normally for less than two weeks and frequently for one day—arranged by selling securities to an investor with an agreement to repurchase them at a fixed price on a fixed date.
Commercial paper - An unsecured promissory notes with a fixed maturity of one to 270 days; usually sold at a discount from face value.
Eurodollar deposit - Deposits made in U.S. dollars at a bank or bank branch located outside the United States.
Take a break...
'money money money ABBA'
Federal Agency Short-Term Securities - (in the US). Short-term securities issued by government sponsored enterprises such as the Farm Credit System, the Federal Home Loan Banks and the Federal National Mortgage Association.
Federal funds - (in the US). Interest-bearing deposits held by banks and other depository institutions at the Federal Reserve; these are immediately available funds that institutions borrow or lend, usually on an overnight basis. They are lent for the federal funds rate.
Municipal notes - (in the US). Short-term notes issued by municipalities in anticipation of tax receipts or other revenues.
Treasury bills - Short-term debt obligations of a national government that are issued to mature in 3 to 12 months.
Money market mutual funds - Pooled short maturity, high quality investments which buy money market securities on behalf of retail or institutional investors.
Open Market Operations (Intended federal funds rate - Fed/USA)
Open Market Operations (ECB - Latest key figures)
Open market operations (Wikipedia)
Monetary Policymaking (Federal Open Market Committee - FOMC - Fed/USA)
| Reports | Analysis | Opinions | Comments |
"...At last the National Review Online has published an article attacking the dangerous idea that "the Federal Reserve should set the fed funds rate" (Stop Targeting the Fed Funds Rate). Paul Hoffmeister, chief economist at Bretton Woods Research, argues that price pressures ought to force supply-siders to reconsider their belief that the Fed needs to lift short term rates to halt the rise in the price of gold. It's his opinion that current trends in the US economy suggest that targeting the funds rate "has wholly failed in effectively restraining money-supply growth in relation to money demand". .."
Read more...» How Confusion About the Money Supply is Damaging the US Economy (Safehaven 09/04/2006)
Sources: Wikipedia.org; Safehaven.com; Others; .1MTX 2007/2008
Huge Market archive - Worldwide News - and the biggest trading glossary
|MARKETS | Money Markets | Money Markets | Basics
© 2010 1MTX GmbH . All rights reserved |