book chapter 2 debt securities and markets (the markets for debt …
book chapter 2 debt securities and markets
short term and long term debt markets
the cash market
The cash market deals in very short-term borrowing and lending (loans).
This market incorporates the overnight interbank market in exchange settlement (ES) funds in which the typical maturity period is 24 hours (i.e. overnight).
The conventions in this market are such that funds are typically invested ‘at call’ or at ‘term’
at-call funds can be entered into (negotiated) at anytime during the trading day but are generally withdrawn, repaid or renegotiated each morning, typically prior to 11 am
term deposits are repaid at maturity, and interest is usually also paid at maturity.
the broader money market
The money market deals in short-term securities such as Treasury notes, BABs and promissory notes.
This market has the same group of participants as the cash market, but itcan also be accessed directly by smaller corporations and high-net-worth individuals
the fixed income market
the markets for debt
securities in Australia
the corporate bonds market
the government bonds market
short-term (discount) debt instruments and long-term debt instrument
the associated benefits
risks to security holders
the operations and methods of the Australia Office of Financial Management and the Reserve Bank of Australia in the market for debt securities
the increasing role of the repurchase agreement market
the wide use of repurchase agreement in open market
operations conducted by the Reserve Bank of Australia
the role of credit rating agencies and their methodologies
the potential risks involved in using credit ratings
the growing corporate paper market and the market for so-called interest rate securities
the role of securitisation
developments before the Global Financial Crisis
developments after the Global Financial Crisis