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O Introduction
O What is it ?
O Treasury bill
O Certificate of deposit
O Commercial paper
O Bankers acceptance
O Eurodollars
O Repos
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`lobal financial market

Short term liquidity Funding for global financial market



 


O 
 

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The core of the money market consist:

O Bank borrowing and

O lending to each other

Using
O 

-
O 



O and similar instruments.
 




[. Treasury bills
2. Certificate of deposit
3. Commercial paper
4. Banker¶s acceptance
5. Eurodollars
6. Repos


O |ost marketable money market security
O Source of raising money from public (`ovt.)
O Short term securities
O Affordable
O Risk free
O Exempt from taxes






O Time deposit with bank
O Issued by banks
O Brought through brokerages
O Specific maturity date
O Specific interest rate
O Interest depends on number
of factors





O Short term money

O Unsecured

O |aturity no longer than 9 months

O Considered safe investment

Types :
a) Promissory note

b) Certificate of Deposit




O pegotiable time draft
O Short term credit investment
O Like a post dated cheque
O Very Safe Asset
O Used in international trade.


O Contrary to the name
O US dollar denominated deposits
O Evolved in Europe
O Relatively free of regulation
O Average Eurodollar deposit is very large
O Same as domestic CD
(Certificate of deposit)
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O Repurchase agreement
O Dealer of `ovt. securities
O Very short term maturity
O Low risk
O Help eliminating credit problems

 
O |oney market specializes in Debt securities
O |oney market securities are very liquid
O Safe investments
O CDs are safe but yield less return
O Commercial papers are unsafe but returns are
great
O BAs are used frequently used in international
market
O Eurodollar deposits are very large
O Repos are overnight borrowings