The American market is big money and most of the financial system in a country where hundreds of banks and other participants negotiated billions of dollars a day. This is a wholesale market for low-risk, high short-term liquid debt. Includes short-term U. S. Treasury and federal agency debt, negotiable certificates of deposit banking, opening of deposit accounts, payment of participation in bankers short-term bank loans, notes the city, commercial paper, federal funds and Eurodollars.
The heart of the silver market in the floor traders and brokers. In fact, there is a market, but the different instruments and different markets that remain close relationship. An important feature is the speed of any operations of hundreds of U.S. dollars U.S. dollars and trust between the actors. Trade is negotiated with the telephone terminal or a computer in seconds and does not break. The motto is: The word is my bond.
Borrowers in the market, including domestic and foreign banks, the government, enterprises of all types, the Federal Home Loan Bank and other federal agencies, dealers in money market instruments, and many states and cities. Lenders, including insurance companies and pension funds more and more other financial institutions.
Financial markets vital functions. The first is the transfer of large sums of money between banks. This is necessary because most of the big banks need more resources than they deserve in the form of deposits, while small banks have more deposits that can be used indoors profitable. Financial markets are a means by which the cash rich companies and other institutions can be diverted to the money, the banks in a short period of time.
The money market is where the U. S. Treasury to sell large amounts of debt easily. This is also the place where open market operations of the Federal Reserve to control interest rates and monetary expansion. The market is where the participants of the structure of short-term rate on Treasury bills and commercial paper yield different lengths to find out how. There is also a market for short-term funds at the international level, where the majority of dollars abroad, financed by foreign entities.
For more information, refers to companies and the rules for trading in financial markets, the book is highly recommended Stigum.
Money Market by Marcia Stigum is the definitive book about the aspect that is not widely known our monetary system. Introduction description given here consists mainly of excerpts from the 3rd edition, published in 1990 by McGraw Hill.
