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Markets, institutions and products, Money market - a wholesale financial…

- - - - Risk transformation - bank is able to reduce its risk exposure to any project by diversifying its loan portfolio among a number of firms
      - Maturity (liquidity) transformation - as the bank lends long term for a risky venture does not meant that the primary lender is subject to illquidity
      - Volume transformation (aggregation) - small amounts of money gathered from numerous savers are repackaged into smaller bundles for investment in the business sector
  - - - Broker
      - Asset transformer
      - Examples:
        
        Banking sector: retail banks, wholesale banks, building societies
        
        Risk spreaders: Unit trusts, investment trusts
        
        Long-term saving institutions:Pension funds, insurance funds
    - - Capital market
      - Money market
      - Examples:
        
        Money market (short-term), bond markets, foreign exchange markets, share markets and derivative markets