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Market Guides > Wholesale loans & deposits

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Published: 13th September 2009 by William Webster

If you borrow or save money at your local bank I expect the sums involved are normally small but when banks deal with each other the amounts are much larger. This market between banks for borrowing and lending cash is known as the interbank or money market. It allows banks with shortfalls to borrow and those with surpluses to lend. Imbalances like this occur everyday and every major currency has its own interbank market. It's at the core of the world's financial system and any disruption to it is potentially disastrous. Let's find out a little more.

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Document Summary

Simple interest. Yield curve. Bid offer spread. What determines dealers profits. Libor fixings. Counterparty credit risk. Interest rate risk. Liquidity risk.

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