Money Market Law and Legal Definition

The money market is the financial market for short-term borrowing and lending. Money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short-term financial instruments commonly called paper. In the U.S, federal, state and local governments all issue paper to meet funding needs. States and local governments issue municipal paper, while the US Treasury issues Treasury bills to fund the US public debt.

Money markets provide liquidity funding for the global financial system.