Financial Institutions and Markets Money markets
Money Markets vs. Capital Markets Money markets: source of short-term funding Capital markets: source of long-term funding
Money Market Products Discount market Interbank market Certificates of deposit (CDs) market Commercial paper market Repurchase agreements Euromarkets
Money Markets and Monetary Policy Lending to banks Open market operations: purchase of treasury bills and commercial bills Repurchase agreements: purchase of government bonds with agreed repurchase terms All three actions affect market interest rates