Geldmarkt

The Geldmarkt, or money market, refers to segments of the financial markets where short-term debt instruments with maturities of up to one year are issued, traded, and settled. It serves to provide liquidity to financial institutions and corporates and acts as a channel for monetary policy transmission. Transactions are typically wholesale and often conducted over the counter, emphasizing high credit quality and low default risk relative to longer-term securities.

Typical instruments in the Geldmarkt include short-term government securities such as treasury bills, certificates of deposit, commercial papers, and repurchase agreements (repos). Interbank loans and other short-term funding arrangements are also common. Instruments are characterized by standardized maturities, high liquidity, and relatively low yields, reflecting the low risk and high credit quality of borrowers.

Participants consist mainly of banks, non-bank financial institutions, corporations, central banks, and money market funds. Central banks use money market operations, including repos and reverse repos, to manage system liquidity and to implement monetary policy. The money market contributes to price discovery for short-term interest rates and supports short-term funding and liquidity management across the financial system.

Regulation and market infrastructure vary by jurisdiction but generally involve financial supervisors, local regulations, and clearing and settlement platforms. In the euro area, the market is influenced by policy rates and benchmark rate reforms, with reference rates such as the euro short-term rate (€STR) playing a key role. Ongoing developments include modernization of benchmarks, risk management improvements, and greater transparency in trading and settlement.