The Money Markets Handbook: A Practitioner's Guide

Preface

The money markets are an important element of the debt capital markets, and are defined traditionally as being the market in traded debt securities of up to one year’s maturity from date of issue. Money market instruments are used by all users and suppliers of short-term capital, and the market is the vital conduit through which the participants are brought together. This book is a succinct and hopefully clear review of the main money market securities, both cash and off-balance sheet, traded around the world. This includes cash market instruments such as CDs and T-bills, together with short-dated derivatives like Libor futures and forward-rate agreements. We have expanded the coverage however, to include a review of bank asset and liability management, or ALM, which is an essential part of banking, and regulatory capital issues. This subject has been developed considerably beyond bank short-term liquidity management, and we consider the main points here. This part of the book will therefore be useful those who are involved in bank and security house money-market trading, or those involved with bank asset & liability committees. In a separate chapter we review a substantial topic in its own right, the bond repo markets; this covers the mechanics of repo and its uses as part of the bond and money markets. More sophisticated products that are also part of the markets, such as asset-backed commercial paper conduits and basket Total Return Swaps, are also described. In short, ...