MM CHAPTER 1

MM CHAPTER 1

1. DEFINITION

   • S-T FUNDING NEED
     • HOUSEHOLDS
       • TRADE CLAIMS & ASSETS (NOT MONEY)
     • BUSINESS
     • GOV
     • SURPLUS FUNDS
       • GOV
       • HOUSEHOLDS
         • TRADE CLAIMS & ASSETS (NOT MONEY)
       • BUSINESS
   • < 12 MONTHS
   • PROCESS
     • INDIRECT FINANCING
       • FINANCIAL INTERMEDIARY
     • DIRECT FINANCING
   • INVOLVES INTEREST
   • TYPES
     • WHOLESALE
       • LARGE
         • BANKS
           • CORPORATE BANKING
             • LARGE LISTED FIRMS
           • BUSINESS BANKING
             • SMALLER FIRMS (MAY/MAY NOT BE LISTED)
           • RETAIL BANKING
           • PRIVATE BANKING
             • HIGH NET WORTH
         • LARGE CORPORATES
         • PARASTATALS
         • INSURERS
         • PENSION FUNDS
         • ASSET MANAGERS
     • RETAIL
       • NOT TRADABLE
         • PERSONAL LOANS
         • BANK DEPOSITS

2. PURPOSE

   • CORPORATES & BANKS
     • S-T FINANCE
       • MANUF INPUTS
       • IM/EXPORTS
       • MAINTENANCE PROJECTS
     • ATTRACTING DEPOSITS (BANKS)
   • CASH MAN
     • EXCESS $$$
       • INVEST
   • GOV FINANCE
     • S-T PROJECTS FINANCE
   • MONETARY POLICY
     • MANAGE LIQUIDITY
       • CASH RESERVES
   • FINANCIAL SECTOR REG
     • KEY REFORMS
       • S-T RESILIENCE OF LIQUIDITY RISK PROFILE OF FIN. FIRMS
         • CONSEQUENCE OF 07/08 CRISIS
         • BASEL 3
           • STABLE FUNDING RATIO (SFR)
           • LIQUIDITY COVERAGE RATION (LCR)
   • PRICE DISCOVERY
     • i CALCULATED
       • ISSUER: CREDIT RISK
       • INSTRUMENT: LIQUIDITY
         • DEMAND/SUPPLY
       • EFFICIENT PRICE DISCOVERY PROCESS
         • MM INSTRUMENTS
           • DERIVATIVES

3. PARTICIPANTS

   • BANKS
     • NB ROLE
       • CUSTODIANS OF PUBLIC'S $
     • ISSUE & TRADE
     • FIN. INTERMED.
     • CENTRAL BANK INTERVENES MAINLY THRU BANKS
   • LARGE BORROWERS
     • COMMERCIAL BANKS
     • LAND BANK
       • PROMISSORY NOTES
       • BILLS
     • NON-FIN CO
       • FRNs
       • CAPITAL PROJ BILLS
       • CALL BONDS
   • SARB
     • CORP. OF PUBLIC DEPOSITS (CPD) (subsidiary of SARB)
       • INVESTS SURPLUS PUBLIC SECTOR FUNDS
     • SIG AFFECTS MM ENVIRON
       • FURNISH ACCOMODATION TO BANKS
       • DEAL WITH BANK CASH SHORTAGES
   • LESS NB
     • PIC
     • L-T INS
     • PENSION FUNDS
     • PARASTATALS
       • ESKOM
       • TRANSNET
     • OFFSHORE INVESTORS
   • BORROWERS
   • LENDERS
   • BROKERS & DEALERS