Banks cut credit lines to each other as uncertainty about counterparty credit risk increased. Hence, between 2008 and 2022, the share of interbank assets and liabilities in terms of total loans of German banks fell from 19% to 8%. Liquidity provision through central banks increased.
[15] More recently, the volume in the German interbank market has increased, but it remains far below the values observed prior to 2008 (Chart 3). Chart 3: Interbank exposures have declined following the global financial crisis. While the interbank market is a channel for direct contagion in the financial system, common exposures to the same shock can lead to indirect contagion effects.