The French “money market”

Abstract

The article describes the features and operating techniques of the French money market. The author briefly recalls the events which led to the transformation of the old “marche hors banque” into the present “marche monetaire”, in which the dominant role is played by Treasury paper; and he refers to the measures adopted in 1926, the coming into existence around 1930 of the first rediscount companies, the introduction in 1938 of open-market policy, and the post-war innovations. There follows an account of the structure and modus operandi of the so-called “money market” in France under present conditions. Attention is drawn in particular to the special circumstances which, in contradiction to the logic of the system, have led to the maintenance, for many years, of “money market” rates which are above the official rate of discount.