Money at call and short notice. In Britain, money loaned to the discount houses, i.e. to the money market, on a short-term basis by the commercial banks. These loans are regarded as part of the liquid assets of the banks because they can be withdrawn immediately or at periods of notice of up to fourteen days. They also include overnight loans. The terms of the loans vary, and in practice the money may not be called in for long periods. The discount houses use the money to purchase treasury bills and other short-term paper, so that the call-money rate is normally always below the treasury bills rate. If the banks do call in their loans, then the discount houses may be forced to borrow from the bank of England. The commercial banks are willing to loan their liquid funds to the money market in this way, because they know that the Bank of England will act as a lender of last resort. In most other countries the major commercial banks invest directly in short-term paper and have direct access to the central bank for loans (e.g. t^> federal reserve system).
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