Large and systemically important banks receive more favourable terms when borrowing from other lenders in the interbank markets, a paper published on Wednesday by Norges Bank shows.

"In particular, domestic banks that may be considered ‘too big to fail' and ‘too connected to fail' are able to borrow at relatively lower rates than other banks," write Q. Farooq Akram and Casper Christopherson, the paper's authors. "This result emerges even when we control for variables representing interbank