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.
"Overnight Interbank Loan Markets" JOURNAL OF ECONOMICS AND BUSINESS 58, no.
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.
The apex bank left borrowing costs for interbank loans unchanged on Thursday.
Related-party exposure is sizable (0.5x FCC at end-9M17), although about 40% is represented by interbank loans to National Factoring Company, which is an unconsolidated factoring business of the group.
This framework consists of the real estate loan limit of 20 percent of total loan portfolio, net of interbank loans, as well as the real estate stress test limits which were adopted in pursuit of the BSP's objective of fostering financial stability,' according to the BSP.
They have not specified what further sanctions they could impose on Doha, but commercial bankers in the region believe that Saudi, Emirati and Bahraini banks might receive official guidance to pull deposits and interbank loans from Qatar.
Banks with a lower value of LOTA (i.e., banks with lower lending activity with non-bank clients) focus more on other types of banking business such as interbank loans or trading in securities.
Even interbank loans, traditionally included on balance sheets, have been turned into "interbank investment businesses," which can exist off balance sheets.
We assume that the assets of bank k at time t include investments, interbank loans, and liquid assets, denoted by [I.sub.k](t), [L.sub.k](t), and [M.sub.k](t), respectively, and that its liabilities are composed of deposits, interbank borrowing, and net worth, denoted by [D.sub.k](t), [B.sub.k](t), and [W.sub.k](t), respectively.
It is claimed the senior executives used interbank loans to make the lender appear more valuable between March 1 and September 30, 2008.