ABSTRACT
A money market may be defined as a centre in which financial institutions congregate for the purpose of dealing impersonally in monetary assets. This serves to emphasise three essential characteristics of such markets. Firstly, the group of markets, collectively described as a 'money market', is concerned to deal in a particular type of asset, the chief characteristic of which is its relative liquidity (the readiness with which it can be converted into cash without risk of substantial loss). Secondly, such activities tend to be concentrated in some centre (or centres) which serves (or serve) a region or area; the width of such areas may vary considerably-some 'money markets' (like London and New York) have become world financial centres, or at least international in their scope; the direct influence of others may be restricted to part only of a national economy (e.g, Chicago or San Francisco in the United States, though these may have links more or less strongly developed with other centres in the same economy. In one or two instances, there may be a situation which can almost be described as a 'condominium' (e.g., Sydney and Melbourne in Australia; Bombay and Calcutta in India; Toronto and Montreal in Canada), though ultimately it is the general experience that one or the other will establish primacy. Thirdly, on a very strict definition, the relationships that characterise the money market must be impersonal in character and competition will be relatively pure (dealings between the parties concerned should not be governed or influenced wholly or in part by personal considerations); this ideal is probably more nearly approximated in New York than elsewhere, though relationships are now rather more impersonal in London than used to be the case, with a consequent increase in competitiveness.
