The money market
is a general term for the markets in which banks
lend to and borrow from each other, or trade financial instruments
such as Certificates of Deposit (CDs). The market normally trades in maturities up to one year. It provides short to medium term liquidity
in the global financial system
. Derivatives of the money market include forward rate agreements
(FRAs) and futures
Trading takes place between banks in the "money centres" (New York and London primarily, also Chicago, Frankfurt, Singapore, Hong Kong, Tokyo, Toronto, Sydney).