How the interbank market works

The banks as institutions that lend cash not only have a market to businesses and families, but also have a market to other banks. This is the interbank market where banks are charged with money left each additional in case of need. So you understand how this market is managed in here we give details how the interbank market works. Market update news we should know always to be updated.

interbank market works

How it works interbank market

The interbank market is one in which operations is conducted monetary regulation between banking institutions of the European Union, and even among these. The interbank market is considered a measure of monetary policy which ultimately liquid assets are traded at very short notice. In the short term, as these operations are carried out through various central banks where deposits are received and transferred in the medium term a day. As an example of an operation, we can pick those operations that banks with excess liquidity held to transfer this to others with a deficit of the same so that both reach the balance.

What are the functions of the interbank market?

The interbank market not only tries to balance deposits and liquidity available to other banks, but also has other functions resulting from this Mismatches can cover the cash reserve ratio. In online market you can get all news.

  • Regroups the excesses and deficits treasury
  • Operations financed assets
  • Improved control of the operations of the Bank
  • Is the basis for creating the prices of other markets?
  • Receives signals from the monetary authorities and transmitted to the financial system.