Forex glossary
Interbank Market
The interbank FX market is the segment where banks trade currencies with each other directly or through platforms. It forms part of fragmented OTC markets, with prices depending on credit, trade size and execution channel. A wholesale quote is not a guaranteed price for a retail brokerage account.
Illustrative example
How does it work in practice?
In a hypothetical transaction, bank A buys 2 million EUR from bank B at an agreed rate. A retail customer sees a different broker quote reflecting their access, order size and account conditions.
A case to work through
Terms before price
In a fictional file, bank A quotes 1 million EUR and bank B 5 million EUR for a different settlement date.
- Record each offer's bid/ask side and size.
- Match settlement and access conditions before comparing price.
What follows? Do not rank incomparable offers by the price alone.
Example boundary: Wholesale quotes do not guarantee retail-account terms.
A useful distinction
Interbank Market / Prime brokerage
Prime brokerage concerns credit-based access; interbank identifies bank-to-bank trading.
Check your understanding
Check whether bank quotes are comparable.
Show the answer and explanation
Side, size, settlement and access
These specify comparable offers.
FX participants, access and execution
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Read the fuller explanation
Related terms
Sources and documentation
- FX trade execution: complex and highly fragmented – BIS
Describes dealer-customer segments, platforms and prime-brokerage credit relationships.
Document read: - bis.org
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.