Money market, Microeconomics

Money market:

The money market is a market of short-term loans. It consists of financial institutions having surplus fund to lend on short-term basis, and those wishing to borrow. The market allocated savings into investments thereby promoting rational allocation of resources. It also encourages savings and investment habits by promoting liquidity and safety of financial assets. Institutions that operates in the market include the Central Bank, commercial banks, and discount houses.The major short-term instruments associated with the Nigerian money market includes treasury securities, commercial papers, call money, Bankers’ Unit Fund, Banker’ Acceptance, etc.

The capital market on the other hand, is a market for mobilizing long-term funds. It is a market for new issues of securities as well as for trading in existing securities. The major instruments for raising funds in the market include equities, debentures, bonds, and stocks. The main institutions in the capital market are the stock exchange, the issuing houses, and the stock broking firms.

Posted Date: 1/3/2013 1:42:44 AM | Location : United States

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