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 ?
Federated anticipates that these and other changes will offer investors a full menu of product choices for liquidity management, including money market mutual funds and other options.
Federated will continue to offer Treasury and government money market funds.
8 billion in United States money market accounts at brokerage firms.
Brokers follow a variety of policies, both in straight deposits to their money market funds and in the frequency of the ``sweeps'' of money from a cash management account into a money fund.
When investors buy shares of a money market fund, the fund's manager uses the money to purchase short-term debt instruments known as money market securities.
The new release of STN's money market portal also offers dynamic fund performance research tools and expanded analytical data - such as performance details by user-defined fields and comparisons of portfolio performance against all funds' performance - to help customers make more informed investment decisions.
Assets of money market mutual funds for the week ended the previous Wednesday, Jan.
Services offered on STN or STN Money Markets requiring regulatory oversight are provided by SunGard Institutional Brokerage Inc.
We strongly believe that the institutional money market constituents need a product that extends beyond the simple electronic execution capability.
Telerate offers complete and accurate money market information, including its page five industry benchmark, which is the most widely viewed page in the financial information industry.
CEO Frank Holmes said of the expense cap extension, "Our continued commitment to keep the fund's yield high, relative to those of other government-only money market funds played a large part in our decision to extend the 0.
According to Michael Lydon, vice president and chief information officer at Reich & Tang, the key factors in selecting PORTIA to supplement the group's existing portfolio management system were its sophisticated money market functionality and robust compliance module.