Börsenlexikon: Money Market

The money market is the sub-market of the financial market on which short-term funds (claims and liabilities) are traded with central bank money balances. Supply and demand are formed via the money market interest rate. The money market differs from the capital market in that the term for the provision of capital is shorter. The boundary between the two markets is usually drawn at maturities of one or two years. The players on the money market are the central bank, credit institutions, financial intermediaries and large industrial companies. The following instruments are allocated to the money market: - Overnight and time deposits - Repo and lending transactions - Short-term securities (money market paper) - Central bank facilities - Money market derivatives (forward rate agreements, overnight index swaps, money market futures) - Bills of exchange