(1) The oldest of the money markets is the discount market, but there are also the newer sterling and foreign currency markets.

(2) Arguably the increased demand to buy in the discount market would push up the price and depress the yield.

(3) The discount market helps to make a secondary market in this type of paper.

(4) Secondly, it means that any liquidity shortage initially suffered by banks will be instantly transferred to the discount market.

(5) We accept these Bills of Exchange and arrange for them to be discounted on the Discount Market.

(6) It will be seen that the bulk of the funding for the discount market comes from banking sector institutions.

(7) However, the shortage of liquidity is transferred to the discount houses and the discount market.

(8) The current arrangement is that the Bank will support the discount market by dealing rather than lending.