BUSI 3405U Lecture Notes - Lecture 3: Primary Dealer, National Festival Of Polish Song In Opole, U.S. Route 360
Document Summary
Money market short term securities with high liquidity are traded, usually sold in large denominations, low default risk, mature in one year or less from issue date. Banks have information advantage on credit worthiness of participants, they do no mediate savers and borrowers, they are heavily regulated, creates a distinct cost advantage. Money market securities are usually sold in large denominations (,000,000 or more) They mature in one year or less from their issue date. Banks do mediate between savers and borrowers; however, they are heavily regulated. Reserve requirements create additional expense for banks that money markets do not have. Regulations on level of interest banks could offer depositors lead to a significant growth in money markets. Marketable and highly liquid with means they can be converted to money at full value very quickly, they have high moneyness. Government of canada-bank of canada-commercial banks-businesses-investment and securities firms-individuals.
