Interbank Market

  

Categories: Banking, Trading

See: Interbank. See: Market.

Banks lend to other banks. They all live under the same regulatory rubric, and by having them all connected, like squid telepathically communicating with each other, it adds positive network externalities to broader issues, like theft and security and targeting of good, bad, and ugly would-be borrowers.

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Finance: What is Electronic Communicatio...12 Views

00:00

Finance a la shmoop what is the electronic communication network or ECN?

00:09

all right it's the computerized and wired version of this for a small fee [Large computer network]

00:15

traders can plug in to a network to trade stocks you know think about it

00:20

like Facebook for stock traders only with less political ranting and fewer

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photographs of babies and freshly cooked meat generally well generally speaking [A pan of meat and potato's appear]

00:29

ECNs are "off-market" that is they aren't really directly part of

00:35

an established trading system like the New York Stock Exchange or Nasdaq or one

00:39

of the other blessed exchanges they connect market makers directly to third

00:44

parties allowing them to trade to their heart's content there aren't a lot of

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actual physical hands at work here most of the limit orders are matched

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electronically the network charges its fee the transaction is processed and [Company share price appears]

00:58

life moves on so think about it like it's 2:00 a.m. on a Saturday and Joe who

01:03

likes to trade in his underwear don't ask us why it's just dying to sell a [Joe sits down at PC]

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hundred shares of coke to Betty who likes to trade while head-banging to Led

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Zep and you know likes to trade with Achmed who's saving money for an air

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conditioner yeah well no sweat so this is perfect for anyone who wants to

01:21

become active in the trading of stocks but hates any kind of physical human [Man waving to woman and woman walks by]

01:26

interaction yeah don't worry the robot rebellion will soon be upon us and ECNs

01:31

will rule the roost

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