M4 includes everything in M2 (also called the retail component of M4) plus:
- other deposits with an original maturity of up to five years
- other claims on financial institutions such as repos and bank acceptances
- debt instruments issued by financial institutions including commercial paper and bonds with a maturity of up to five years.
- 95% of the inter-MFI difference.
Major financial institutions (MFI) means banks (including the Bank of England) and building societies. The inter-MFI difference is defined by the Bank of England as "the mismatch in reporting of UK MFIs assets and liabilities with each other". It is the deposits banks have with each other after netting off. 5% of the mismatch is assumed to be due to amounts in transit.
As noted with regard to M3, governments (or central banks) do not have the same direct control over broad money as they do over the monetary base. This does not prevent monetary policy from being effective as it usually now operates through control of interest rates. See open market operations, M0, M1 and money multiplier