Interbank lending is the financial system’s backstage—where banks quietly borrow and lend to each other to keep money moving, meet daily obligations, and smooth out surprises. One institution ends the day with excess cash; another faces a shortfall from withdrawals, settlement flows, or loan demand. The interbank market is where those gaps get bridged—sometimes overnight, sometimes for weeks—often secured by high-quality collateral, sometimes unsecured when trust is strong. It’s also where confidence shows up in real time: when rates tighten, spreads widen, or liquidity dries up, you can feel stress before it hits the headlines. In this hub, you’ll find our best articles explaining how interbank rates connect to central bank policy, why repo markets matter, how counterparty risk is managed, and what can go wrong when funding becomes fragile. We’ll unpack the mechanics behind “overnight,” “term,” and “secured” lending, the role of clearing and settlement, and the safeguards—haircuts, margins, limits—that keep the plumbing from leaking. If you want to understand how banks trust, price, and protect each other every day, start here.
Interbank Lending
