Money Market Study Guide
Systematically review the core knowledge framework of the money market, covering basic concepts, structural characteristics, instrumental functions, regulatory frameworks, and trends and developments, and construct a comprehensive knowledge framework from theory to practice.
Basic Concepts and Core Definitions
Definition and Classification of the Money Market
- The money market is a transaction venue for short-term financial instruments, with core functions including short-term loans and bill discounting, primarily serving funds circulation and term matching.
- Classification dimensions: short-term (1-1 year), intermediate (1-5 years), and long-term (5 years or more); classified by instrument as bonds, certificates, and time deposits.
- Core Functions: Liquidity Management, Interest Rate Formation, Funding Intermediary Function.
Main Participants' Roles
- Core Participants: Central Bank (Central Bank), Commercial Bank, Securities Company, Insurance Company, Pension Fund, etc.
- Central Bank as the regulatory center, Commercial Banks as financial intermediaries, and Institutional Investors as market participants.
- Special Role: Issuers of Innovative Tools Such as Central Bank Bills Swap (CMT)
Primary Instruments of the Money Market
- Bond market instruments: government bonds, local government bonds, and corporate bonds, emphasizing credit risk and liquidity risk.
- Banker's Acceptances and Commercial Acceptances, which possess the ability to be discounted.
- Deposit Certificate Market Tools: Bank CDs, Repurchase Agreements, used for short-term funding loans.
Money Market Structure and Participant Roles
Money Market Primary Trading Instruments
- Credit Risk and Liquidity Management in Repurchase Agreements (Repo)
- Term Structure of Government Bonds' Reverse Repurchase Agreements and Yield Curve Construction
- The Scale Effect of Money Market Funds and Liquidity Adjustment Mechanisms
- Discounting of Bills: Credit Rating and Risk Premium Calculation
Money Market Participants' Behavioral Characteristics
Regulatory Framework and Institutional Design
Currency Market Regulatory Framework
Regulatory Tools and Market Stability
- Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) Implementation Path
- Central Bank's Liquidity Constraints on Money Market Funds
- Regulatory Coordination Role of the Bank for International Settlements (BIS) in the Currency Market
- Financial Stability Board's Systemic Risk Monitoring Mechanism
Applied Practice and Macroeconomic Control Mechanisms
Monetary Policy Transmission Mechanism
Market Stability and Risk Control
- Liquidity Risk and Regulatory Restrictions of Money Market Funds
- Central Bank's Management of Short-Term Lending Market Interest Rate Ceilings
- Hedging Mechanism in the International Foreign Exchange Market for Exchange Rate Risk
- Design of Liquidity Agreements Between Central Banks and Financial Institutions