The interbank lending market is a market in which banks lend funds to one another for a specified term. Most interbank loans are for maturities of one week or less, the majority being overnight. Such loans are made at the interbank rate (also called the overnight rate if the term of the loan is overnight). A sharp decline in transaction volume in this market was a major contributing factor to the collapse of several financial institutions during the financial crisis of 2007–2008.
Banks are required to hold reserves of an adequate amount of liquid assets, such as cash, to manage any potential bank runs by customers. To remain compliant, those banks with less than the required liquidity will borrow money and pay interest in the interbank market, while those with excess liquid assets will lend money and receive interest.
The interbank rate is the rate of interest charged on short-term loans between banks. Banks borrow and lend money in the interbank lending market in order to manage liquidity and satisfy regulations such as reserve requirements. The interest rate charged depends on the availability of money in the market, on prevailing rates and on the specific terms of the contract, such as term length. There is a wide range of published interbank rates, including the federal funds rate (US), the LIBOR (UK) and the Euribor (Eurozone).
and 29 Related for: Interbank lending market information
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will be terminated in 2024. TONAR - Tokyo Overnight Average Rate Interbanklendingmarket Euribor LIBOR SIBOR HIBOR About JBA TIBOR | JBA TIBOR JBA TIBOR...
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borrow or lend for short periods to/from the conventional interbanklendingmarket. The absence of any, or at least sufficient, Islamic Money Market instruments...
until the institution can decide on where to invest that money. Interbanklendingmarket Siklos, Pierre (2001). Money, Banking, and Financial Institutions:...
computed as a weighted average of all overnight unsecured lending transactions in the interbankmarket, undertaken in the European Union and European Free Trade...
bank vulnerability during the financial crisis of 2007–2008. Bank Interbanklendingmarket Funding liquidity Wholesale Federal Deposit Insurance Corporation...
frequently used for lending to the most creditworthy borrowers, as is LIBOR, the London Interbank Offered Rate. The Federal Open Market Committee (FOMC)...
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