Money market fund

A money market fund (also called a money market mutual fund) is an open-ended mutual fund that invests in short-term debt securities such as US Treasury bills and commercial paper. Money market funds are widely (though not necessarily accurately) regarded as being as safe as bank deposits yet providing a higher yield. Regulated in the United States under the Investment Company Act of 1940, money market funds are important providers of liquidity to financial intermediaries.

Explanation

Money market funds seek to limit exposure to losses due to credit, market, and liquidity risks. Money market funds in the United States are regulated by the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940. Rule 2a-7 of the act restricts the quality, maturity and diversity of investments by money market funds. Under this act, a money fund mainly buys the highest rated debt, which matures in under 13 months. The portfolio must maintain a weighted average maturity (WAM) of 60 days or less and not invest more than 5% in any one issuer, except for government securities and repurchase agreements.

Money market

As money became a commodity, the money market became a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. Trading in money markets is done over the counter and is wholesale.

There are several money market instruments, 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 instruments bear differing maturities, currencies, credit risks, and structure and thus may be used to distribute exposure.

Money markets, which provide liquidity for the global financial system, and capital markets make up the financial market.

Participants

The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods, typically up to thirteen months. Money market trades in short-term financial instruments commonly called "paper". This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity.

Money market (disambiguation)

Money market may refer to:

Qianshi Hutong

Qianshi hutong (Chinese: 钱市胡同; pinyin: qiánshì hútong) translated as money market hutong, is a Beijing hutong recognized as the narrowest in the city. The street is located near to Qianmen, in the Dongcheng district. For most of its 55-metre (180 ft) length it is 70-centimetre (2.3 ft) wide and measures 40 centimetres (16 in) at its narrowest point, requiring passersby to turn sideways.

History

During the Qing Dynasty, Qianshi was a financial center of monetary exchange, home to 26 mints producing copper coins for nearly every bank in the city. The lane narrowed as these banks expanded. After the establishment of the People's Republic of China in 1949, the lane lost its function following the reformation of the monetary system and the production of paper currency.

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