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 ?
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.
Banca Promex's total loans (without Fobaproa's promissory note) decreased by 7% in 4Q96 compared to the previous quarter, due to the maturity of interbank loans granted in 1995.
The Bank's earning assets, excluding the former Banco Osorno's leasing subsidiary and interbank loans, grew 6.
Under the current rules, large banks may also use the current stock of acquired loans, interbank loans and long-term debt securities issued by MSBs to comply with the deposit requirement, which effectively reduces the available amount of funds to be actually dedicated to new assets.
As of June 30, 2005, total loans, net of interbank loans, for the Chilean banking sector grew by Ch$4,311,715 million, or 12.
Furthermore, over the past month, the actual Fed rate has been well below the Fed's target rate because demand for interbank loans has been low as of late (Source: Federal Reserve Bank of New York; New York Times).
The French government has last month established a fund, which was approved by the European Union to make available up to EUR265bn (USD340bn) to French banks to guarantee interbank loans and loans to businesses.
While other European countries such as Britain and the Netherlands have come up with their rescue packages for their financial systems, the French government has pledged to set aside 40 billion euros for capital injections into banks and guarantee up to 320 billion euros in interbank loans.
Total loans, excluding interbank loans, decreased 0.
The scandal revolves around the transfer in early June of 546 billion rupiah (about 80 million dollars) in commissions from Bank Bali to private finance company PT Era Giat Prima for its "services" in helping recover some 120 million dollars in interbank loans owed Bank Bali by several banks that had been shut down.
At the end of 2004 the main sources of credit risk for BI were its loan book (45% of total assets), securities portfolio (38%), and interbank loans (9%).
The BOJ can impact general private-sector interest rate levels by hiking its target for the overnight call money lending rate -- the rate commercial banks charge each other for overnight interbank loans -- or by tightening its quantitative monetary easing policy.