25556 Chapter Notes - Chapter 7 & 8: Price Discovery, Commercial Paper, Credit Risk
Document Summary
The largest issuers are the banks, but it is also used by companies and the commonwealth. Provides a low risk and return investment opportunity for institutional investors: contributions to the banking system: Holds the banking system"s liquid reserves, including loans to the inter-bank overnight market and in securities that can be used in repos with the rba. The money market is a source of funds for banks that can raise funds through the issue of. Ncds, and enables banks to sell the bills they accept to investors: the market discovers the price of short-term funds: Known as the bank-bill swap rate (bbsw) Currently calculated by the asx, was calculated by afma prior to mid 2017. Bbsws are used in loan contracts in which the interest rate is reset on future dates: relationship with the rba: Rba buys and sells money market securities to implement monetary policy.
