2. Highly Organized
Well developed
It satisfies all conditions of good money market.
Well developed banking systems
The bank of England is the central bank of the country
which performs all the functions effectively and
efficiently.
It has many submarkets and each submarket
consisting of number of dealers with large funds.
Highly integrated structure.
3. Bank Of England
Joint Stock Banks
Acceptance Houses
Discount Houses
Bill Brokers
4. The BOE is the leader and occupies the top position of
the London Money Market.
It is the lender of the last resort and the ultimate
serviour of cash.
It also borrows large sum of money in the money
market by its weekly issues of T-bills by tenders.
The BOE act as a banker of the govt.
It controls credit created by commercial banks.
Its credit policy is more effective as London Money
Market is a developed one.
5. Most important constituent after BOE.
Most of the banking business in England is concentrated in few banks,
popularly known as ‘BIG FIVE’.
Midland
Barclays
Llyods
Westministor
National Provincial
JSB receive deposits from the public and lend money to merchant and
manufacturers for short term period.
They also lend to brokers and discount houses amd these loans are repayable
on demand or short notice.
These are called ‘CALL LOANS’
6. Such houses are not found anywhere else in the world.
They accept Bills Of Exchange on the behalf of their
customers.
The bill, accepted by the international reputed
acceptance houses can be readily discounted in LMM
at low rate of interest.
A small commission for this service is charged by the
acceptance house.
7. Specialize in discounting Bills Of Exchange.
Deal in T-Bills and Commercial Bills.
They borrow from the commercial banks for short
periods at low rate of interest and invest them in Bill
Of Exchange.
The purpose is to discount bills at a high rate and enjoy
profit.
8. Act as intermediaries b/w those who want discount
bills and those who want to invest in bills.
They get brokerages for their services.
10. The European market where US dollars can be
deposited and loaned for short periods of time. In this
market, loans are made in
the form of Eurodollars and products are denominated
in the US currency. However, because transactions are
typically $1 million or more, only large institutional
investors participate in this market. Also, because this
market is largely unregulated, banks can lend out 100
percent of the deposits they receive and
therefore offer extremely attractive interest rates.
11. The loose network
of negotiations and transactions occurring
between banks, large financial institutions or other
large companies. Interbank markets are unregulated
by governmental entities, and are often associated
with currency transactions. Trades can be
conducted directly between each entity or through
electronic brokering platforms. This market allows
over 1000 banks to trade between one another.
