Money Markets - An Introduction

This course focuses on wholesale money markets, which are markets where the lending/borrowing or buying/selling of short-term funds and securities occurs between large institutions such as banks, institutional investors, corporations, and central banks. The course describes the main market participants, including commercial banks and money market funds, and the key products, such as interbank lending, repos, short-term government securities (“bills”), and commercial paper (CP). The course also looks at the major pricing issues in the money markets as well as some developments in recent years in relation to pricing benchmarks.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Outline the role of the money markets and the key players in these markets

    Describe the features of the main money market products

    Explain the basics of money market pricing and some of the key issues that arise in that regard

  • COURSE OUTLINE

    Topic 1: Overview of the Money Markets

    What are the Money Markets?

    Money Market Products

    Money Market Participants

    o Commercial Banks

    o Money Market Funds

    o Other Participants

    Topic 2: Key Money Markets Products

    Lending

    o Interbank Lending

    o Repos

    • Key Features

    • Tri-Party Repos

    • Central Clearing Counterparty (CCP) Repos

    o Impact of the Financial Crisis on Lending Markets

    Securities

    o Government Bills

    o Commercial Paper (CP)

    •  Asset-Backed Commercial Paper (ABCP)

    o Trade Bills & Bankers’ Acceptances (BAs)

    Topic 3: Money Markets Pricing

    Overview of Money Market Pricing

    Interest Rates

    Credit Spreads

    Day Count Conventions

    Discount Calculations

    Interest/Coupon Calculations

    Interest Rate Derivatives

    o FRAs/Interest Rate Futures

    o Options/Interest Rate Guarantees

    o Interest Rate Swaps

    Pricing Benchmarks

    o Interbank Term Deposit Rates

    o Overnight Rates

    o Securities Rates

    o Benchmark Problems/Issues

  • PREREQUISITE KNOWLEDGE

    Financial Markets – An Introduction - View Now

  • ESTIMATED COMPLETED TIME

    75 Minutes

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