What is money market?
The economy and our financial market consists of many different areas and sections. One of these is the so-called Money market. The money market is part of the financial market. On it is listed with the Central Bank money balances of the normal banks.
The operation is simple. Each bank has only a certain quota allocated by the central bank for financial resources, so a given amount of cash. If now needs a bank for some reason more money than their allocated by the central bank, it must borrow money from other banks, which in turn have a surplus and thus have extra central bank money. So to speak, a bank borrows the other bank their surpluses of their allocated quota.
It is of course the risk to the participants in the money market so far, where it is always the possibility of a total loss is present. A bank is active in this area is tempted by the diversification, thus reducing the broad diversity of resources, the risk as much as possible.
falls into this system and the money market account , which is a classic bank account. Here, for his creation, a certain amount is paid and calculated after each recalculation, a current interest rate.
From a personal perspective I find it appalling when banks have to lend each other money. The
Normal citizens are tricked always that the entire financial system is safe and reliable, but on closer examination it becomes clear that even the banks believed to be safe, where every ordinary citizen deposited his savings are not really sure and it takes only a few weeks to provoke a financial crisis that can bring all investors about their deposits.
This system is very immature and needs an urgent overhaul to keep it after the survive the current crisis again comes to a disaster where you may no longer facilitate.
