# Interbank Lending

*Banking & Payments — Finicade finance glossary*

Interbank lending is banks lending reserves to each other, usually overnight, to manage day-to-day liquidity. The rate on it is the anchor for short-term rates across the economy. Its most important property is informational: when banks stop lending to each other, as in August 2007 and September 2008, it signals that they doubt each other's solvency, and it is the clearest possible crisis indicator.

**Also known as:** interbank market, overnight lending, fed funds market

**Related terms:** [Wholesale Funding](https://finicade.com/glossary/wholesale-funding), [SOFR](https://finicade.com/glossary/sofr), [LIBOR](https://finicade.com/glossary/libor), [Repo (Repurchase Agreement)](https://finicade.com/glossary/repo), [Federal Funds Rate](https://finicade.com/glossary/federal-funds-rate)

Source: https://finicade.com/glossary/interbank-lending