1. Financial institutions can lend temporary surplus capital positions in time through the interbank lending market, thus reducing idle funds and increasing total asset returns.

2. On the other hand, financial institutions, especially commercial banks, do not have to deliberately keep more excess reserves in order to maintain a certain statutory reserve, which enables financial institutions to use all funds more fully and effectively, increase the proportion of profitable assets and improve the profitability of total assets.

3. In addition, the existence of interbank lending market is also beneficial for financial institutions to flexibly adjust their liquidity reserves and improve the average and overall profitability of their portfolios.

The following is an introduction to the interbank lending market:

The interbank lending market is a market for short-term financing between financial institutions other than the central bank, that is, financial institutions adjust their capital positions by using regional differences and time differences in financing, and financial institutions with excess funds borrow short-term funds from financial institutions with insufficient temporary funds.

Interbank lending funds are mainly used for the balance of bank temporary deposit bills settlement and other temporary fund shortage needs. The interbank lending market can provide financing needs for non-central financial institutions with insufficient reserves, and can also reflect the supply and demand of funds and the intention of monetary policy in a timely manner. The interbank lending rate formed in this market will not only affect other currency markets, but also have a great impact on the capital market and derivatives market.

For the above information, please refer to Baidu Encyclopedia-Interbank Lending Market.