Interbank Loan


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Interbank Loan

A loan that one bank makes to another. Interbank loans may be made to ensure that banks meet their capital requirements at the end of each day. Interbank loans involving a central bank may be a way to control the money supply. Interbank loans must be repaid with interest in a stated period of time, often within a day. In such cases, interbank loans are called overnight loans.
References in periodicals archive ?
As the UK banking system is highly concentrated, the 16 banks cover around 71 % of the total interbank loans of UK-owned banks in 2004, calculated from the data published by the Bank of England.
Efficiency and Bargaining Power in the Interbank Loan Market.
In addition to lowering the ffr and increasing the supply of available funds for the interbank loan market, an intervention by the Fed has a multiplier effect by which an increase in one bank's reserves, R, can lead to multiple deposits being created throughout the banking system.
When credit chains involve financial intermediaries such as banks, central banks can lower their target rates to reduce intermediaries' costs of borrowing, accept a wider range of collateral, guarantee interbank loans, or shore up banks' health through capital injections.
An increase in this price is a clear incentive to provide more interbank loans because a higher interbank interest rate makes these transactions more profitable.
Net interbank lending, that is to say the difference between interbank loans and deposits, remained positive and reached 94 749 million euros at the end of August 2016.
It is claimed the senior executives used interbank loans to make the lender appear more valuable between March 1 and September 30, 2008.
The volume of interbank loans in foreign currency amounted to 115.
The central bank may also include CNY500bn of interbank loans to non-deposit taking financial institutions in the calculation.
At end-September 2013, market funding was split between 90% securities, 6% interbank loans, 4% hybrid bonds.
The proposal, which has been submitted to Parliament and Council, is part of the EU's response to the Libor scandal of 2012, where the fixing of interest rates used for interbank loans was manipulated to give a false impression of financial health.