A money market is an agreement that brings about a direct and indirect contact between the lenders and borrowers. Borrowers like merchant, trader, manufacturer, business concern. Lenders like commercial bank, central bank, insurance company, financial concern. finance is defined as the provision of money at time when it is required. financial institution plays a very importat role in the economic system.
Features of developed of money market:
- Commercial bank
- Central bank
- Sub market
- Near money assets
- Available ample resources
- Integrate rate structure
- Other features of developed money market
- Commercial bank: It is the backbone of the money market. It is also the important component of the money market. For a developed money market, commercial bank plays a very important role for increase the money supply in the market because they provide loans to their customer. So that it is very helpful for the economic development of the country because bank provide loan for trade and without money trade is not possible.
- Central bank: central bank also the important play important role in developed money market. It is the controller and guardian of the money market. It is the last lender of the money market. It also raise and reduced the flow of the flow of money in the market.
- Sub market: sub market means combination of various specialized market but sometimes various unspecialized market are included in the market so that no development in the money market.
- Available ample resources: ample resources means attract foreign funds. Ample resources are necessary for the smooth running of the money market.
- Near money assets: when there is a large no. of near money assets then it is more helpful for the developed money market. Near money assets like bill of exchange, negotiable instrument, government bonds, treasure bills.
Integrate rate structure: central bank is very helpful for the controller of the money market because different interest rate is different-2 sub market so when change in the bank interest rate then result in equi- proportionate change in the interest rate. So we can say that, central bank is very helpful for the controller and guardian of the money market.
- Other features of developed money market:
- Industry development
- Boom
- Depression
- Bill of exchange
- Volume of international trade