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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.


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The decision to guarantee bonds follows an earlier pledge to back bank deposits and interbank loans announced 12 October 2008.
He said he would meet with Spanish bankers in January to encourage them to spread credit after the government pledged to guarantee interbank loans of up to 100 billion euros.
A mechanism that supports such interbank loan transactions would better do the trick,'' he said.
 
 
 
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