What is the interbank market?

The interbank market is a forum through which banks of trade currency. It is a foreign exchange market, which means that it only trades in the currencies of different countries, unlike stocks, mortgages or other assets. This market is important because the currencies of most countries have floating exchange rates. Their values ​​fluctuate based on the value of other countries. Trade in the interbank market helps to determine these values. Through their trading, these banks determine the value for the international currency similar to the way of trading in shares determine the value of companies and commodities in the United States. Banks participating in the interbank market are called market banks. These intermediaries are called electronic brokerage platforms. The two largest electronic brokerage platforms are electronic mediation services (EBS) and Reuters Group Limited. Before EBS was created, Reuters Group Ltd. On the electronic mediation market almost monopoly. EBS was created by a partnership of greatmarket banks on the foreign exchange market.

Three forms of operation cooperate on the creation of an interbank market. It is the leading market, spot market and company for global interbank financial telecommunications or swift. Spot Market trades cash on site. In most cases, the currency within two working days over the course of two working days, the amount of time that the banks used to move money from one bank to another than the electronic banking became common. On the other hand, the Forward market traders create a contract for future delivery of the amount of currency.

Unlike the other two, the Swift market is not. It provides a standardized way for banks around the world to communicate. Since autumn 2010, Swift could transmit reports between more than 9,000 financial institutions around the world. Swift is owned by member banks and is based in Brussels in Belgium.

Swift offers a banCaters several benefits for communication separately. First, SWIFT sends payment reports in a highly secure format for protection of financial information. Second, all swift messages follow the standard format. This means that banks around the world are able to read messages sent by others. Swift is now an industry standard for formatting and content content, even if the message is not sent via Swift.