?
Funds
Deposits Loans
FINANCIAL
INSTITUTIONS
-Commercial
Funds banks,Investment banks,
Mutual funds,Leasing Funds
comp.,etc. Vallyon Andrea 2010 13
Investment decision
Warren Buffett
Monometallism
Bimetallism
Greshams axiom. The good money was
crowded out by the worse
Acceptability
Discounting papers
Commercial papers, trade bills
(kereskedelmi vlt)
Today e-money
world economy
Q?
Other possibilities
Call money
Interbank market
Repurchase agreement /repo/
- Time deposit
Call money
Term: very short period of time
Overnight(12p.m-12p.m. next day)
3 or 7 days notice
Negotiable: no
Money is lent by one bank to another
and may be called back anytime
T-bills
Domestic instruments issued by governments to raise short term finance
balancing cashflow
Non-interest bearing and interest-bearing, sold at discount in auction
Negotiable
Generally 13,26,52 weeks
Certificate of deposit - CD
Usually issued by banks, is simple the evidence of time deposit
Negotiable not as time deposit
Sold at discount or pay coupon
Interest payed at maturity
30 days to 3 month or could be longer
Commercial paper- CP
Issued by large, safe and well-known
companies bypassing banks to achieve lower
borrowing rates (sometimes below the banks
prime rate)
Very short term (max 270 days, most 60days
or less)
Issued at discount
Unsecured security
Vallyon Andrea 2010 32
Money market securities
Instruments
Bonds
Government bonds
Local authority papers
Mortgage or other assets backed bonds
Corporate
Foreign
Junk
Shares
Preferred
Normal
Innovations
Convertibles
Variables
Investment notes Vallyon Andrea 2010 34
Thanks for your attention!