In finance, the money market is the global financial market for short-term borrowing and lending. The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated In Economics, a financial market is a mechanism that allows people to easily buy and sell ( Trade) financial Securities (such as stocks and bonds The bond market (also known as the debt, credit, or fixed income market) is a Financial market where participants buy and sell Debt A stock market, or (equity market is a private or public market for the trading of company Stock and derivatives of company The foreign exchange ( currency or forex or FX) market refers to the market for currencies. The derivatives markets are the Financial markets for derivatives The market can be divided into two that for exchange traded derivatives and that for Commodity markets are markets where raw or primary products are exchanged The spot market or cash market is a Commodities or Securities market in which goods are sold for Cash and delivered immediately Over-the-counter ( OTC) trading is to Trade Financial instruments such as Stocks bonds, commodities or derivatives Real estate is a legal term (in some jurisdictions notably in the USA, United Kingdom There are two basic financial market participant categories Investor vs See Investor AB for the Swedish investment company An investor is any party that makes an Investment. Speculation, in a financial context is making an investment that increases the overall risk in a portfolio Institutional investors are organizations which pool large sums of money and invest those sums in companies Corporate finance is an area of Finance dealing with the financial decisions Corporations make and the tools and analysis used to make these decisions Structured finance is a broad term used to describe a sector of Finance that was created to help transfer Risk using complex legal and corporate entities Capital budgeting (or investment appraisal is the planning process used to determine whether a firm's long term Investments such as new machinery replacement machinery new Financial risk management is the practice of creating economic value in a firm by using Financial instruments to manage exposure to Risk, particularly Accountancy or accounting is the measurement statement or provision of assurance about financial information primarily used by Lenders managers, Financial statements (or financial reports) are formal records of a business' financial The most general definition of an audit is an evaluation of a person organization system process project or product A credit rating agency ( CRA) is a company that assigns Credit ratings for Issuers of certain types of Debt obligations as well as the debt instruments Personal finance is the application of the principles of Finance to the monetary decisions of an individual or family unit Credit is the provision of resources (such as granting a Loan) by one party to another party where that second party does not reimburse the first party immediately thereby generating Debt is that which is owed usually referencing Assets owed but the term can cover other obligations A contract of employment is a category of Contract used in Labour law to attribute right and responsibilities between parties to a bargain Retirement is the point where a person stops employment completely A financial planner or personal financial planner is a practicing professional who helps people deal with various personal financial issues through proper planning which includes Public finance is a field of economics concerned with paying for collective or governmental activities and with the administration and design of those activities A banker or bank is a Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money Fractional-reserve banking is the banking practice in which Banks keep only a fraction of the value of their Bank notes and demand deposits in reserve A central bank, reserve bank, or monetary authority is the entity responsible for the Monetary policy of a country or of a group of member states This is a list of Banks throughout the world Africa Central Bank Bank A deposit account is a current account at a Banking institution that allows money to be deposited and withdrawn by the account holder with the transactions and resulting balance A loan is a type of Debt. This article focuses exclusively on monetary loans although in practice any material object might be lent In Economics, money supply, or money stock, is the total amount of money available in an Economy at a particular point in time Financial regulations are a form of Regulation or supervision which subjects Financial institutions to certain requirements restrictions and guidelines aiming to There are a variety of Finance designations or Accreditations that can be earned and awarded to those in the finance industry Accounting scandals, or corporate accounting scandals are political and business scandals which arise with the disclosure of misdeeds by trusted executives A stock market bubble is a type of Economic bubble taking place in Stock markets when price of Stocks rise and become overvalued by any measure of Stock A recession is a contraction phase of the Business cycle. The U A stock market crash is a sudden dramatic decline of Stock prices across a significant cross-section of a Stock market. The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated In Economics, a financial market is a mechanism that allows people to easily buy and sell ( Trade) financial Securities (such as stocks and bonds It provides short-term liquid funding for the global financial system. Market liquidity is a Business, Economics or Investment term that refers to an Asset 's ability to be easily converted through an act of buying The global financial system ( GFS) is a Financial system consisting of institutions and regulations that act on the international level as opposed to those The money market is where short-term obligations such as Treasury bills, commercial paper and bankers' acceptances are bought and sold. Treasury securities are Government bonds issued by the United States Department of the Treasury through the Bureau of the Public Debt. Commercial paper is an unsecured Promissory note with a fixed maturity of one to 270 days A banker's acceptance, or BA, is a time draft drawn on and accepted by a Bank.

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". Financial instruments are cash evidence of an ownership interest in an entity or a contractual right to receive or deliver cash or another financial instrument This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity. The capital market is the Market for securities, where companies and Governments can raise longterm funds

Participants

The core of the money market consists of banks borrowing and lending to each other, using commercial paper, repurchase agreements and similar instruments. Commercial paper is an unsecured Promissory note with a fixed maturity of one to 270 days Better known as Repurchase agreements ( RPs or repos) a Sale and Repurchase Agreement has a Borrower (seller/cash receiver sell securities These instruments are often benchmarked to the London Interbank Offered Rate (LIBOR). The London Interbank Offered Rate (or LIBOR, ˈlaɪbɔr is a daily Reference rate based on the Interest rates at which Banks offer to lend

Finance companies such as GMAC typically fund themselves by issuing large amounts of asset-backed commercial paper (ABCP) which is secured by the pledge of eligible assets into an ABCP conduit. GMAC (or GMAC Financial Services) formerly known as General Motors Acceptance Corporation was previously the wholly owned Financial services arm of General In Finance, an asset-backed security is a type of debt security that is based on pools of Assets or collateralized by the cash flows from a specified pool Commercial paper is an unsecured Promissory note with a fixed maturity of one to 270 days Examples of eligible assets include auto loans, credit card receivables, residential/commercial mortgage loans, mortgage backed securities and similar financial assets. Certain large corporations with strong credit ratings, such as General Electric, issue commercial paper on their own credit. A credit rating assesses the Credit worthiness of an individual Corporation, or even a country Other large corporations arrange for banks to issue commercial paper on their behalf via commercial paper lines.

In the United States, federal, state and local governments all issue paper to meet funding needs. States and local governments issue municipal paper, while the US Treasury issues Treasury bills to fund the US public debt. In the United States, a municipal bond (or muni) is a bond issued by a city or other local government or their agencies The United States Department of the Treasury is a Cabinet department and the Treasury of the United States government. Treasury securities are Government bonds issued by the United States Department of the Treasury through the Bureau of the Public Debt. The United States total public debt, commonly called the national debt, or U

• Trading companies often purchase bankers' acceptances to be tendered for payment to overseas suppliers. A banker's acceptance, or BA, is a time draft drawn on and accepted by a Bank.
• Retail and Institutional Money Market Funds
• Banks
• Central Banks
• Cash management programs
• Arbitrage ABCP conduits, which seek to buy higher yielding paper, while themselves selling cheaper paper.

Trading takes place between banks in the "money centers" (London, New York, and Tokyo). London ( ˈlʌndən is the capital and largest urban area in the United Kingdom. New York ( is a state in the Mid-Atlantic and Northeastern regions of the United States and is the nation's third most populous officially, is one of the 47 prefectures of Japan and located on the eastern side of the main island Honshū.

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. A banker's acceptance, or BA, is a time draft drawn on and accepted by a Bank. A cashier's check (also known as a cashier's cheque, bank check, official check, teller's check, bank draft or treasurer's check
• Certificate of deposit - A time deposit at a bank with a specific maturity date; large-denomination certificates of deposits can be sold before maturity. A certificate of deposit or CD is a Time deposit, a financial product commonly offered to consumers by Banks thrift institutions, and A time deposit (also known as a term deposit, particularly in Canada Australia and New Zealand; a bond in the United Kingdom
• 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. Better known as Repurchase agreements ( RPs or repos) a Sale and Repurchase Agreement has a Borrower (seller/cash receiver sell securities
• Commercial paper - An unsecured promissory notes with a fixed maturity of one to 270 days; usually sold at a discount from face value. Commercial paper is an unsecured Promissory note with a fixed maturity of one to 270 days
• Eurodollar deposit - Deposits made in U. Eurodollars are deposits denominated in United States dollars at Banks outside the United States, and thus are not under the Jurisdiction of the S. dollars at a bank or bank branch located outside the United States.
• 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. The government sponsored enterprises (GSEs are a group of Financial services corporations created by the United States Congress. The Farm Credit System is a network of borrower-owned Cooperative lending institutions and related service organizations in the United States serving all 50 states and Puerto The Federal Home Loan Banks provide stable on-demand low-cost funding to American Financial institutions for home Mortgage loans small business rural
• Federal funds - (in the US). See also Federal Reserve System This article is about funds maintained by the U 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. In the United States, the federal funds rate is the Interest rate at which private Depository institutions (mostly banks lend balances ( Federal funds
• Municipal notes - (in the US). In the United States, a municipal bond (or muni) is a bond issued by a city or other local government or their agencies 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. Treasury securities are Government bonds issued by the United States Department of the Treasury through the Bureau of the Public Debt. For the U. S. , see Treasury bills. Treasury securities are Government bonds issued by the United States Department of the Treasury through the Bureau of the Public Debt.
• Money market mutual funds - Pooled short maturity, high quality investments which buy money market securities on behalf of retail or institutional investors. Money funds (or money market funds, money market mutual funds) are Mutual funds that invest in Short-term debt instruments
• Foreign Exchange Swaps - Exchanging a set of currencies in spot date and the reversal of the exchange of currencies at a predetermined time in the future.

See also

• Money supply
• Sweep account

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