The term 'money market' covers the vast network of deals involving the lending and borrowing of cash in a range of currencies, generally between financial institutions such as banks, as well as manufacturers and the government. It also covers the market for tradable securities, such as Treasury Bills (shorter-term government-issued IOUs).
'Wholesale' means funds borrowed or lent by those financial institutions in large quantities, rather than the smaller amounts dealt in by private individuals. Money market rates vary between currencies and are determined by the supply of, and demand for, short-term cash. Being market-driven, they paint a truer picture of loan costs than central banks' official interest rates.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
What are wealth taxes and would they work in Britain?The Treasury is short of cash and mulling over how it can get its hands on more money to plug the gap. Could wealth taxes do the trick?
-
UK bank stocks are no bargain – here's a safer alternativeOpinion Britain's banking sector faces severe political risks. Switch into this global financials trust instead, says Max King
