Short Term Paper Market

Short Term Paper Market-3
There are several money market instruments in most Western countries, including treasury bills, commercial paper, bankers' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage- and asset-backed securities.The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend.

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A SCP is defined as a bond with a term of 270 days (9 months) or shorter that is issued in the inter-bank bond market by a non-financial corporation that has enterprise capacity and a high credit rating, usually AAA.

The term of an SCP ranges from seven days to nine months.

Money market is an important part of the economy which provides short-term fund.

The money market is the part of financial market which deals in the borrowing and lending of short-term loans generally for a period of less than or equal to 365 days.States and local governments issue municipal paper, while the U. The acceptance houses and discount markets help in financing foreign trade.The money market contributes to the growth of industries in two ways: The Money Market enables the commercial banks to use their excess reserves in profitable investment.Currently, the qualified issuers of super & short-term commercial paper include AAA central enterprises and their core subsidiaries with assets and revenues accounting for over half of their respective groups’ total size.All the contents stated above are for your reference only.Though the central bank can function and influence the banking system in the absence of a money market, the existence of a developed money market smooths the functioning and increases the efficiency of the central bank.Money markets help central banks in two ways: There are two types of instruments in the fixed income market that pay interest at maturity, instead of as coupons—discount instruments and accrual instruments.Participants borrow and lend for short periods, typically up to twelve months.Money market trades in short-term financial instruments commonly called "paper".Please consult the local branch of China Merchants Bank for further information.China Merchants Bank reserves the ultimate right of interpretation for the contents in this page.


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