Lecture 12
Domestic &
International Money
Markets

What I want you to learn
Domestic & International Money Markets
Matter, especially in illiquid times.

Domestic

Public Issue
Tender Issue
T-Bills Auction Issue
Direct Placement
+ Tranches

Commercial Paper
Interbanks
Also: Acceptances, Repurchases
CDs

International

Eurodollars/Euromarket

Bonds

What is a bond?

!\"#$%$&' ()*+',#*-$.'#&/'&0*1$&2*34#',23*
Eurozone Bond Spreads over Germany (bps)
$.'#*-'#/,&+*56&*1437
:))
98)
9))
(8)
())
8)
)
-'#/,&+ ;#,&<' ='>?6\"/ @0,>+ A4,6& D$#0\"?,> E\"30#6, @#'>,&2 -#''<'
BC*

Exchange Rates
Real Effective Exchange
Rate

01\"$#.2%345678994
36:99
A)\"1$*./%B*.C &DG%E\"1*F2
&DA%E\"1*F2 <$F#)*./%E\"1*F2
39:99
96:99
99:99
46:99
49:99
;6:99
;9:99
56:99
6 > 5 4 8
; 9 3 ? 6 > 4 8 ?
@ 5 ; 9 3 @ > 4 8 ? >
6 5 ; 9 3 @ 6 5
75 = 75 = 75 = 75 = 75 = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 7; = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 74 = 79 = 79 = 79 = 79 = 79 = 79 = 79 = 79
=
< \" < \" < \" < \" < \" <\" < \" < \" < \" < \" < \" < \" <\" < \" < \" <\" < \" < \" < \" < \" < \" < \" <\" < \" < \" < \" < \" < \" < \" < \" < \" < \" < \"

A$
9:;
9:6
5:5
5:8
5:<
5:=
5:>
5:?
5:@
5
-7
66
1
$2
76
B( 6
5:5>6
C7
66
A$
-7
9
9:;>8
19
$2
79
B( 9
C7
99
A$
-7
9
15
$2
79
B( 5
C7
95
A$
-7
9
18
$2
79
B( 8
C7
98
A$
-7
9
1<
$2
79
B( <
C7
9<
A$
-7
9
1=
$2
79
B( =
C7
9=
A$
-7
9
1>
!\"##$%&'()%\"'(*+,$-.('%$/(
$2
79
01\"-/,#2'$3(%$.(4'566678996
B( >
C7
(monthly)
9>
A$
-7
9
1?
$2
79
B( ?
C7
9?
A$
-7
9
1@
$2
79
Dollar/Euro Ex. Rate
B( @
C7
9@
A$
-7
9
1;
$2
79
B( ;
C7
5:>@>>
9;
A$
-7
96

>1
8:;<
8:=7
8:=<
8:<7
8:<<
8:97
'6
?@ 55
$ 65
>+ 5
%65
A/ 5
\"6 5
>1 5
'6
?@ 88
$ 68
>+ 8
%68
A/ 8
\"6 8
>1 8
'6
?@ 84
$ 68
>+ 4
%68
A/ 4
\"6 8
>1 4
'6
?@ 87
$ 68
>+ 7
%68
A/ 7
\"6 8
>1 7
'6
?@ 8B
$ 68
>+ B
%6 8
A/ B
\"6 8
>1 B
'6
?@ 8C
4555-6-7889
$ 68
>+ C
%6 8
A/ C
\"6 8
>1 C
!\"#$%&'()*+$,-*./01'(#-21\"#3-
'6
?@ 8;
$ 68
>+ ;
%6 8
A/ ;
\"6 8
>1 ;
'6
?@ 8=
$ 68
>+ =
%68
A/ =
\"6 8
>1 =
'6
?@ 8<
$ 68
>+ <
%68
Sterling/Euro Ex. Rate
A/ <
\"6 8
>1 <
'6
?@ 89
$ 68
>+ 9
%68
A/ 9
\"6 8
9

Next Time:
Stablisation & Growth
Pact: Handcuffs for
Ireland’s economic
policy makers