Interbank sterling market
The unsecured interbank deposit market began to develop in the 1960s as the wholesale market in which banks and others lend and borrow money for predetermined periods ranging from overnight to one year, to accommodate short-term liquidity needs or for the lending on of surplus funds. This market was given further impetus by the deregulatory reforms of the early 1970s, the abolition of exchange control at the end of the 1970s and the final lifting of the retail banks lending ceilings. The 1980s saw a surge in intermediation as the newly liberalised banking system greatly extended the range of financing facilities provided to its industrial and commercial customers.
Since 1985, the rates shown are representative rates and are the mean of the bid and offer rates obtained from a minimum of three brokers at 8.30 am ; for earlier periods the figures are described as the mean of the lowest bid and highest offer rates over the day.
The figures shown for the one month rate for 1970-1977 inclusive are for the last Friday of each period. The figures shown for the three months rate for 1970 and 1971 are for the last Friday of the month; from 1972 - 1977 inclusive, the figures are the average of Fridays in each period.
These are quoted (nominal) rates and are the mean of the bid and offer rates from three or more brokers at 8.30am . SONIA is the weighted average rate to four decimal places of all unsecured sterling overnight cash transactions brokered in London between 0001 hrs and 4.15pm London time. From 2 June 2003 , all sterling overnight deals irrespective of counterparty status, with a minimum size of £25 million transacted by WBMA members will be included in the SONIA calculation. Previous to this, counterparties to SONIA transactions were on Section 43 of the Financial Services Authorities list of Listed Money Market Institutions, and their overseas branches, as of 2 November 2001 .