Interbank spread

Interbank spread

The difference between a bank's offer and bid rates for deposits in the Eurocurrency market.
References in periodicals archive ?
The interbank spread has drifted back down to levels not seen since October, and Italian, Spanish and Irish 10-year benchmark bonds are flirting (positively) with 6%, 5% and 7% yields respectively.
A combination of dollar-linked currency pegs and tightening interbank spreads saw GCC central banks follow the Fed's 25 bps March hike.
Since the first largescale LTRO in December, Euro area interbank spreads have fallen in a straight line, from more than 100bp to around 55bp as we write, a level last seen back in early August.
As the debt crisis in Europe is expected to constrain liquidity in the region, Norges Bank will impose a quota on bank reserves, which is expected to force lenders to depend on each other for funds, thereby reducing interbank spreads.
"Interbank spreads in the Eurozone are running at elevated levels and investors are worried about their exposure [to the bloc].
Recall that because interbank spreads increased in most markets and most currencies, credit risk is likely important.
Credit spreads have widened out and interbank spreads are the widest that they have been at any time in the last 12 months.
However, during the financial crisis of 2007-09, interbank spreads increased markedly, and lending through the interbank market declined.
The ECB's support for euro area money markets, with another potentially huge second tranche still to come in late February, seems to be capping the interbank spreads that gauge banking stress.