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| [M] monetary aggregates See money supply. monetary base Those assets that depository institutions can use to meet their legal reserve requirements. The monetary base consists of deposits (reserves) held by depository institutions at Federal Reserve Banks plus Treasury currency and coins outstanding. Monetary Control Act of 1980 - MCA An Act which requires that all banks and all institutions that accept deposits from the public make periodic reports to the Federal Reserve System. Starting in September 1981, the Fed charged banks for a range of services that it had provided free in the past, including check clearing, wire transfer of funds, and the use of automated clearinghouse facilities. monetary policy The regulation, by the Federal Reserve System, of the money supply in order to maximize production and employment and stabilize prices. See also contractionary monetary policy and expansionary monetary policy. monetize To convert assets into money. money market Figurative expression for the informal network of dealers and investors over which short-term debt securities are purchased and sold. Money market securities generally are highly liquid securities that mature in less than one year, typically in less than ninety days. money market rates See short-term interest rates. money multiplier The relationship between the monetary base and the money supply. The multiplier explains the money supply has expanded through the banking system by distribution of excess reserves. money supply The amount of money (coins, paper currency, and checking accounts) that is in circulation in the economy. moral hazard The risk that a party to a transaction has not entered into a contract in good faith, has provided misleading information about its assets, liabilities, or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles. multilateralism An international policy intended to free international trade from the restrictions of bilateralism. Multilateralism represents an effort to permit nations to specialize in production and exchange in accordance with the principle of comparative advantage. mutual savings banks Banks which accept deposits primarily from individuals and place a large portion of their funds into mortgage loans. These institutions are prominent in many of the northeastern states. Savings banks generally have broader asset and liability powers than savings and loan associations but narrower powers than commercial banks. Savings banks are authorized to offer checking-type accounts. |
| BUSINESS DICTIONARY |