ECON350 Lecture Notes - Lecture 8: Commercial Paper, Commercial Bank, Qantas
Document Summary
Contents: features and functions, money market instruments, post gfc. Features and functions: the money markets (st) are a loose collection of markets for particular types of securities, all short-dated (between 1- 270 days), where institutions of all types access (bank and govt), place and adjust their liquidity. It is difficult to overstate the need that institutions have for liquidity, given the timing differences between cash collections and disbursements. (cb no liquidity problem cause can print money and govt have liquidity need too!) Cause always got mismatch between receivable and payable. No single money market like stock exchange cuz multiple money market with different maturity even tho issuing by the same economic unit like govt. Cb no problem with the liquidity because have the ability to print money. No single money market multiple instruments with different maturity. For eg: 3 month treasury bond and each of them have single market.
