Fixed Income and Debt

Money Markets - Part 1 (2023)


This eCourse consists of two modules. Module 1 focuses on wholesale money markets, which are markets where the lending/borrowing or buying/selling of short-term funds and securities occurs between large institutions such as banks, institutional investors, corporations, and central banks. The module discusses the main sectors and products of the money market and the key risks involved in trading and investing in money market instruments.

Module 2 focuses on banks and their role in the interbank money market. The structure of the wholesale money markets is examined, as well as the .relationship that banks have with each other in terms of credit and their ability to manage currency payments. The key money market instruments and rates as well as the practicalities associated with trading and settlement in the interbank market are also outlined in detail.


On completion of this course, you will be able to:
- Define the money markets and how they differ from bond markets in terms of maturities and operations
- Identify the key role of interbank lending in the money market and how such lending was impacted by the global financial crisis
- Recognise the importance of the Fed funds market in the US
- Recall the main features of repurchase agreement (repos) and their key subtypes
- Identify other key money market instruments such as Treasury bills, commercial paper (CP), certificates of deposit, and FX swaps
- List the key risks associated with investment in money market instruments such as interest rate risk, credit risk, credit spread risk, counterparty risk, and liquidity risk
- Recognise the global nature of the interbank market and its key participants, such as banks, nonbank corporates, pension funds and money market funds, and governments
- List the key money market instruments and rates
- Identify the main money market settlement systems worldwide, such as Fedwire, CHIPS, Target2, and CHAPS
- Recognize the importance of appropriate credit risk assessments in the interbank market and the key elements involved in such assessments


Module 1: Money Markets - An Introduction
Topic 1: What are Money Markets?
Topic 2: Interbank Lending
Topic 3: Repurchase Agreements (Repos)
Topic 4: Federal Reserve Requirements & Fed Funds
Topic 5: Treasury Bills (T-Bills)
Topic 6: Certificates of Deposit & Commercial Paper
Topic 7: Other Key Money Market Products
Topic 8: Risks in Money Markets

Module 2: Interbank Money Market
Topic 1: Overview of the Interbank Money Market
Topic 2: Money Market Instruments & Rates
Topic 3: Interbank Settlement & Payments
Topic 4: Interbank Credit Assessment


Relevant Subject
Type 1 - Dealing in securities
Type 4 - Advising on securities
SFC:2.00, PWMA:2.00
Chinese Securities Association of Hong Kong (HKCSA): HK$630
All Member: HK$600
Non-Member: HK$900
Staff of Corporate Member: HK$600