1.1 BACKGROUND OF STUDY
A money market is a market for short term securities. It provides services that are essential to modern economy. According to Professor G.O Nwankwor.
“It offers access to variety of financial instruments that enable economic agent to pool, price and exchange risk. Through assets with attractive yields, liquidity and risk characteristics, it encourages saving in financial form”.
This is very important for government and other institutions in need of short-term funds who, because of their liabilities, undertake to maintain part of their assets in liquid form.
Late professor W.O. Uzoga, observed that the primary objective of developing a local money market was to stem the representation of short term funds into the London money market by creating domestic outlets for investments in short term funds in Nigeria.
A colliery to this was the used to lay a sound foundation for efficient regulation for the monetary and banking system, and to provide for the banks the basic financial instruments for effective management of their resources.
We should all be aware that the banking sector is quite distinct from other sectors of the economy. The banking sector deals with money and quasi – money which does not involves the use of heavy technological equipment like we have in the industrial sector.
There is no need for the usage or raw material nor is there any need to incur production cost and waste. Human being to pin point specifically, the investors and industrialists are their raw materials, while “The staff cost in terms of wages, salaries and remuneration are to be counted as their production cost.
As tradition might have it, the bank of any banks has been depicted to encompass the development of the economy, people and the bank itself. As noted by Jerry Onyebula, a senior manager with Allied Bank PLC.
The direction which the development takes decision whether the economy will become more productive or redundant” He goes further to argue that:
“When banks develop, its subordination in the right direction, it helps them to grow and become bigger and richer person.
This will directly determine whether he or she will develop, grow or whether improve or deteriorate”
It is an undeletable fact that no matter how the economy is depressed, people will still transact business and save their money in the banks. Since our economy is not quenched type of economy, people must still save, no matter what the economy seems to be.
It was in pursuit of these objectives that the first issue of treasury bill of N8 million was made by the Central bank of Nigeria in 1960. by the end of the year, Treasury bills outstanding amounted to N18 million.
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