interbankt

Interbank is a term used in finance to describe transactions or lending that occur directly between banks. This typically involves banks lending money to each other, often for short periods, to manage their liquidity needs. The interest rate charged on these loans is known as the interbank rate.

These interbank transactions are crucial for the smooth functioning of the financial system. Banks use the interbank market to adjust their reserves, meet regulatory requirements, and finance their day-to-day operations. When a bank has excess funds, it can lend them to another bank that needs them, and vice versa.

The interbank rate is a key benchmark for many other interest rates in the economy, including those for mortgages, business loans, and credit cards. Central banks often influence interbank rates through their monetary policy tools, such as setting reserve requirements or conducting open market operations. This influence helps them control inflation and stimulate or cool down economic activity.

Different countries and regions have their own specific interbank markets and reference rates. For example, in the United States, the federal funds rate is a significant interbank rate. In Europe, Euribor is a widely used benchmark. The transparency and efficiency of these interbank markets are vital for financial stability.