Money markets in the United States of America
Keywords:Money markets, United States, Eurodollars, NCD, securities, Federal funds, Federal Reserve
The article presents a detailed description of the money markets in the U.S. In recent years, new markets such as bankers’ acceptances, commercial paper, Negotiable Certificates of Deposit and the external extension of the New York market into Euro-dollars have have been established. Despite the growth in some of these markets, however, the main markets in the U.S. remain those in Government securities and Federal funds. It is through these markets that idle money in the U.S. is mobilised and distributed across the country as a whole. In this context, full use is made of correspondent relationships and both the banks and the dealers attempt to tap every possible source of funds. The intensity of this search for new sources of money has had the effect of binding together much more closely the various parts of the financial mechanism and has made it much more sensitive to Federal Reserve action.
JEL: E44, E58