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4. Money market International financial services 1

4. Money market International financial services 1. Main fields of interest. Money market architecture Main segments of money market Main instruments Interest rates quotation , reference interest rates. Money market structure. O/N interest rate. Spot yield curve.

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4. Money market International financial services 1

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  1. 4. Money marketInternationalfinancialservices 1

  2. Mainfieldsofinterest • Money market architecture • Mainsegmentsof money market • Maininstruments • Interestratesquotation, reference interestrates

  3. Money market structure O/N interestrate Spot yieldcurve Forwardyieldcurve, volatility ofinterestrates Interestratesspread Unsecuredinterbank market Bankingsystemliquidity management Interestratesderivatives Short-term securities Monetarypolicyimplementation Securedinterbank market Liquidityofbankingsystem Individualliquidity Speculation Hedging Liquidityinvestments

  4. Unsecuredinterbank market • main segment of money market usedforalocationliquidityamongthebanksandforliquiditydistributionbetweencentral bank andbanks • strong O/N maturity preference in liquiditymanagmenetanddue to credit risk management • understrongimpactoffinancialcrisis, newcapital base andliquidityregulation • strong preference ofcounterpartyfromhomeeconomy (insidemonetary union)

  5. Maturity structureand volume oftrades in EUR interbank market

  6. Structureofcounterparties on Eurointerbank market in 2010

  7. Securedinterbank market – repo market • repoas term deposit secured by collateral in termsofsecuritiesor as a sellandbuybacktransaction • main instrument for bank‘s liquidity management andshort-term fundsalocation • a wayoffinancingof bond issuance, bond holding andshortexposurecovering in securities market • bilateral, bilateralCCPs (BrokerTec, Eurexrepo a MTS) and tri-party repotrades (custodianbanks) • reporate as a priceofrepotrade • initialmarginandhaircut • preference ofshort-term maturity

  8. Dolar, euro andpoundrepomarket

  9. Structureof Euro repomarket accordinga type oftrade

  10. Maininterestratederivatives • FRA • interestrate swap • interestrateoption • exchangetradedfuturesandoptions

  11. Euromoney market • Eurointerbank market • Leadingworld bank‘s liquidity management • LIBOR as reference interestrateforbankingloans • Eurocommercialpapersandeuronotes • Alternative to short-term bankingloanand T-bills

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