Eurobanks and the inter-bank market

Quarterly Bulletin 1981 Q3
Published on 01 September 1981

This article, which has been prepared mainly by J G Ellis of the Bank's International Division describes and analyses the eurocurrency inter-bank market.

  • The inter-bank portion of the euromarkets is now worth several hundred billion dollars and represents two thirds of the total market. It performs a necessary and valuable role in linking non-bank depositors and borrowers.
  • This inter-bank market is important to all eurobanks and vital to many of them. Some smaller banks tend to rely almost completely on this market to fund their offshore operations.
  • The characteristics of different categories of banks affect their involvement in the market. In the UK segment of the market, for example, American banks are significant suppliers of inter-bank funds, while the consortium banks are net borrowers.
  • Fluctuations in inter-bank activity do not appear to be closely related to external influences such as the strength of the dollar or the level of interest rates.
  • Some features of the market could in some circumstances cause difficulty, but there is no evidence that they exercise a destabilising influence.

PDFEurobanks and the inter-bank market

Other Quarterly Bulletin 1981 Q3 articles

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