The Discount Market

  • Jack Revell


All banking systems need a highly developed money market so that banks may adjust their liquidity positions day by day and occasionally during the same day. Until September 1971 it was true to say that there were two money markets corresponding to the two banking systems—the discount market serving deposit banks and the parallel sterling money market serving secondary banks. For some time there had not been a rigid separation between them; secondary banks operated in a small way in the discount market, and discount houses had begun to assume an important role in the parallel market. The new arrangements for the control of banks will bring these two money markets much closer together. The basic difference between them will remain, however, that the discount market is predominantly a market on which lending is secured, while on the parallel market all lending is unsecured. On the discount market the Bank of England acts as lender of last resort to the discount houses, whereas the parallel market lacks a lender of last resort.


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Further Reading

  1. W. M. Scammell, The London Discount Market (London: Elek Books, 1968).Google Scholar
  2. Gillett Brothers, The Bill on London, 3rd ed. (London: Chapman & Hall, 1952).Google Scholar
  3. The following articles from the Bank of England Quarterly Bulletin: ‘Commercial bills’ (December 1961).Google Scholar
  4. ‘The management of money day by day’ (March 1963).Google Scholar
  5. ‘The treasury bill’ (September 1964).Google Scholar
  6. ‘The U.K. and U.S. treasury bill markets’ (December 1965).Google Scholar
  7. ‘The London discount market: some historical notes’ (June 1967).Google Scholar
  8. ‘Competition and credit control: the discount market’ (September 1971).Google Scholar
  9. ‘Reserve ratios: further definitions’ (December 1971).Google Scholar
  10. ‘Competition and credit control: extract from a lecture by the Chief Cashier’ (December 1971).Google Scholar

Copyright information

© Jack Revell 1973

Authors and Affiliations

  • Jack Revell

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