金融市场学双语课件C06-PowerpointSlides.pptVIP

6 Money Markets Chapter Objectives Provide a background on money market securities Explain how institutional investors use money markets Explain the globalization of money markets Money Market Securities Maturity of a year or less Debt securities issued by corporations and governments that need short-term funds Purchased by corporations and financial institutions Large primary market focus Secondary market for securities Money Market Securities Treasury Bills ● T-bills represent the simplest form of borrowing: The government raises money by selling bills to public. ● Investors buy the bills at a discount from the stated maturity value. ● At the bills maturity, the holder receives from the government a payment equal to the face value of the bill. ● T-bills with initial maturities of 91 days or 182 days are issued weekly. Commercial paper ● Large, well-known companies often issue their own short-term unsecured debt notes rather than borrow directly from banks. ● Commercial paper is backed by a bank line of credit. ● Commercial paper maturities range up to 270 days. Money Market Securities Negotiable certificates of deposits certificates of deposit (CD) is a time deposit with a bank. ● The banks pay interest and principal to the depositor only at the end of the fixed term of the CD. ● CDs issued in denominations greater than $100,000 are usually negotiable. ● CDs are treated as bank deposits by the Federal Deposit Insurance Corporation. Federal funds Funds in the bank’s reserve account are called federal funds. ● Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Money Market Securities Repurchase Agreements Repos and reserves: Dealers in government securities use repurchase agreements, also called “repos” or “RPs”, as a form of short term, usually overnight, borrowing. Bankers’ Acceptances A banker’s acceptance starts as an order to a bank by a bank’s customer to pay