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 ?
However, to verify if less contagion losses arise, calibrating assets other than interbank loans becomes necessary because imposing an interbank limit as a share of capital would not trigger a contagion process at all using the existing mechanism.
Efficiency and Bargaining Power in the Interbank Loan Market.
According to data compiled by the newspaper, used as the source for the article, the big four UK banks cut interbank loan volumes by more than 24% to 10.
The interbank loans are cheaper and freely available in the market place as the 3- month Libor rate stood at 26 basis points by the end of last week.
After controlling for counter-party risk using the spread between unsecured and secured interbank loans (Libor less the Repo rate), we found very little evidence that the TAF program has affected the spread.
Interbank loans require their own regulatory capital which must be subtracted from the capital available to sustain commercial loans.
On average, over one-third of the Saudi banks' assets can be considered liquid (in the form of cash, typically short-term interbank loans or investments).
Fear that fellow banks won't repay interbank loans.
The FDIC will provide new, temporary insurance for interbank loans, intended to overcome the crisis of confidence between banks.
Despite financial intervention from government, there seems to be a general unwillingness among lenders to provide mortgage finance priced in line with the sharp downward movements we have already seen in bank rate, the LIBOR rate on interbank loans, and other money market rates.
Indicative of the problem, rates on overnight interbank loans have recently shot skyward.