Money Market

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Money Market


a special sphere of the loan capital market, where capital is offered for short-term loans.

As a component part of the loan capital market the money market has all the typical features of that market. Thus, unlike markets where the objects of buying and selling differ according to their use value, the money market involves a depersonalized mass of monetary capital from which all traces of origin have been erased. The uniformity of the money market is a result of both the standard monetary form in which capital on the market acts as a commodity and the high level of concentration of supply of loan capital accumulated by the credit system. At the same time the money market, like the loan capital market as a whole, typically has numerous forms and methods of transferring capital to loans. The specific features of the transactions carried out on the money market result primarily from the short terms for which loan transactions are concluded: from one day to several months, occasionally up to one year. The primary reason for this is that loans on the money market facilitate the movement of the working capital, not the fixed capital, of the industrial capitalists. They turn to the money market primarily to convert capital from a commodity to a monetary form.

The money market is involved in a broad range of economic transactions: domestic and foreign trade (discounting bank acceptances and drafts, establishing a market for Eurodollars and European currencies), replenishing the monetary reserves of credit and financial institutions (inter-bank loans, rediscounting by a central bank), and making short-term loans to large industrial companies (the “commercial paper” market). It also includes financing stock transactions and servicing the state credit system. In terms of the spheres of the application of capital, the money market includes particular elements of fictional capital and the international currency market. Commercial and industrial firms, banks and other credit and financial institutions, stock speculators, and government institutions and agencies take loans on the money market. Capitalist banks (primarily the central bank and the system of deposit banks) act as the source of capital supply for the money market. Specialized credit and financial institutions (for example, insurance companies or savings institutions) operate primarily in the sphere of long-term credit.

The money market includes credit and settlement transactions by banks, clearing houses, the stock exchange, broker and dealer firms, ministries of finance, and other institutions. Many of the transactions of the money market are carried out orally over the telephone. The center of the money market is usually located in the business section of the main financial and economic point in the country (New York in the United States, London in Great Britain, Montreal in Canada, and Zurich in Switzerland). The interest rates charged for various transactions are an important index of the state of the money market.


References in periodicals archive ?
Money Market Fund, currently a prime money market fund, will change its name and investment strategy to qualify and operate as a government money market fund effective on or about April 29, 2016.
Also last year, and again for the first time, American households had more of their financial assets in money market funds than in checking accounts.
4 billion Prime Money Market Fund and its six tax-exempt funds (one national and five state municipal money funds) as "retail funds," meaning that individual investors will continue to have access to these funds at a stable $1 NAV.
Federated will continue to offer Treasury and government money market funds.
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Money Market Fund Ratings' is available on the Fitch Ratings web site at www.
Tom Nelson, vice president and STN product manager, said, "This new release of the STN Money Markets portal will help our customers to increase automation and to trade more efficiently, while helping meet corporate and regulatory compliance requirements.
The money market component of Business Insured $weep, Reserve Insured Deposits(R), is being offered through The Reserve Funds, founder of the world's first money market fund.
With more than $15 billion in assets under management in separately managed enhanced cash accounts and with more than $168 billion in fixed-income and money market assets under management across all of Evergreen, this mutual fund offering will complement our existing product line and provide institutional clients greater product choice for their cash management needs.
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Wilmington Trust announced that two leading rating agencies, Moody's Investor Service and Standard & Poor's Ratings Services, have assigned their top money market fund ratings to WT Investment Trust I Prime Money Market Series, a $2 billion money market mutual fund structured as a master portfolio.