Interbank rate

The interbank rate ( English interbank rate ) is that rate at which the banks with each other in the interbank trading underlying securities exchange.

General

In the case of securities, a distinction is usually made between stock exchange prices and interbank prices. In addition to securities ( stocks , bonds ), foreign currencies , sorts or precious metals that are not traded on an exchange can be used as underlying assets . The prerequisite is that the underlyings are price-related and not interest-related. Your purchase / sale takes place between the credit institutions as counterparties, either as part of proprietary trading or for customer business. Non-banks are not involved. Are the base values provided for the customer business with non-banks or they originate from this, is by the banks to the customer course ( Final Price still a) margin taken into consideration. It is added at the interbank ask rate when sold to the customer, and deducted from the interbank bid rate when bought by the customer . The following applies:

${\displaystyle {\text{Interbankenbriefkurs}}+{\text{Marge}}={\text{Kundenbriefkurs}}}$ (when selling to the customer) or

${\displaystyle {\text{Interbankengeldkurs}}-{\text{Marge}}={\text{Kundengeldkurs}}}$ (when buying from the customer)

The margin is the profit margin for credit institutions and thus becomes part of the market value . The amount depends on the type of underlying, its trading volume , market development , market liquidity and the bank customer's bargaining power . In foreign exchange trading, it can be up to 4 percent. With regard to the bargaining power of bank customers, a rough distinction can be made between private households and corporate customers . The margin is lower for corporate customers than for private households and is lowest for large companies . In varieties is at the bank counter as well as in the other basic values in the billing always taken into account the closing price.

Reference rates

Reference rates are rates that are used as the basis for transactions and published in the mass media . The exchange rates are determined every working day as reference rates “Euro FX” and published via electronic media and in the specialist press. If the institutions trade with the central bank , settlement is made at the ECB reference rate. Unofficial interbank rates are used for currency transactions between commercial banks. Interbank prices for securities, types or precious metals, on the other hand, are not published, only the official stock exchange price or the closing prices.

For the euro , the European Central Bank publishes reference rates for a large number of currencies on working days, usually at 4 p.m. CET . The Federal Association of German Banks also offers information on current and historical interbank rates with a currency converter function on a website.

Web links

• Currency converter of the Federal Association of German Banks based on the interbank rates with the option of adding the usual surcharges of the banks ; Retrieved June 29, 2016
• European Central Bank website with daily reference exchange rates (en)
• Explanation of the EU on the calculation method of the effective exchange rates (reference rates) in the data warehouse of the European Central Bank. ; accessed on June 29, 2016 (en)

Individual evidence

1. ↑ Klaus Kielkopf, performance of bond portfolios , 1995, p 72
2. ^ Manfred Godek: Foreign currency transactions. Free international transfers to haufe.de from April 7, 2015 ; Retrieved June 29, 2016
3. ↑ Clemens Büter, Foreign Trade: Basics of global and intra-community trade relations , 2010, p. 353
4. ↑ European Central Bank, Euro FX reference rates