Interbank Market
The network where major banks trade currencies with each other.
Full Definition
The interbank market is the global network where large commercial and investment banks trade currencies with each other in wholesale quantities. It forms the core of the forex market, with individual transactions typically exceeding $1 million and often running into the hundreds of millions. Interbank rates set the benchmark prices that retail brokers derive their quotes from, then add spread or commission to create the prices retail traders see.
Top-tier interbank players include JPMorgan, Citi, UBS, Deutsche Bank, HSBC, Goldman Sachs, and several other major banks. They trade among themselves to manage their own currency exposure, facilitate client orders, and take proprietary positions. The rates quoted between these banks during active hours set the most accurate reference for true market value. Retail traders access this deep liquidity indirectly through brokers that connect to prime brokers and liquidity aggregators, which pool quotes from multiple interbank sources into a single feed.
For example, if the true interbank mid-price for EUR/USD is 1.08505 with a 0.1 pip bid-ask spread, a retail broker might add 0.5 pips of markup and quote 1.0850 on the bid and 1.08510 on the ask. That 0.6 pip total spread is how the broker earns revenue while passing through institutional liquidity. On 1 standard lot, the cost is about $6 per round-turn trade, which is very competitive for retail conditions.
In copy trading, the interbank market's pricing flows down through brokers to retail accounts. SteadyFlowFX's subscribers access institutional-quality pricing through regulated ECN and STP brokers on the 8 traded pairs. Understanding where retail prices originate helps subscribers see why tighter spreads at the broker level directly translate to better alignment with the master account's verified performance.