The significance of the so called ‘interbank’ market is that it is the underlying cash market from which STIR futures derive. The interbank is referred to as the ‘Deposit’ or ‘Depo’ market, which is a wholesale OTC market. It is the part of the money markets that is concerned with the borrowing, or lending of large sums of cash, i.e. at least £500,000 or foreign currency equivalent, totally unsecured, for certain fixed periods of time.

The rates quoted are known as the ‘Interbank’ rates simply because they represent the best rates at which the major banks and other large financial institutions (not governments) are prepared to deal.

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