Loan Index (Internal)
What does it mean
An Internal Loan Index is any rate where the rate is determined by the bank itself.
Why does it matter
Banks frequently employ an Internal Loan Index for loan and deposit pricing. This approach grants the bank a degree of influence over rates. While not absolute control, as market forces ultimately prevail, internally determined indexes can either trail behind or lead market rates, providing a flexible pricing mechanism.
Other Relevant Terms
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