Here is a list of key money market (financial market) instruments. These items are described within the context of a Canadian market.
The money market is a 1 trillion market (annual turnover) and a crucial component to help implement monetary policy by the Bank of Canada.
Types of financial instruments traded include:
- Government of Canada Treasury Bills (T-Bills)
*Note - Bank rate is upper end of operating band.
- Short-term government bonds (less than 3 years to maturity)
- Provincial and Municipal short-term notes and T-Bills
- Day-to-day loans, PRA's, and SRA's
- Note - Special PRA's and Special SRA's (repos and reverse repos)
- Purpose is to put downward/upward pressure on rates.
- Call and Short Loans (from chartered banks to securities dealers - at prime rate)
- Chartered Bank Deposites
- Term Notes
- Deposit Certificates (CD's)
- Swapped Deposits (to us)
- Forward Contracts (like futures yet with private party transaction)
- Interbank funds
- Finance Paper (packages of instalment debt contracts held with customers)
- Corporate/Commercial Paper (30 day notes)
- Bankers' Acceptances (30-90 days, bank assumes risk)
- Guaranteed Trust and Investment Certificates (GIC's) (Better than normal accounting)
- Repurchase Aggreements (repos)
- Resale Agreements (Preverse Repos)
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