Banks Lending To Each Other

[Richie88]

With the banks making billions in profit every year why would they
need to borrow from each other?

[factor-fiction]

I'm not sure it's true that they make billions every year but if they do the profits are not sitting in safe somewhere. A business can make a profit of a billion pounds but only have £1 in cash. Banks borrow money in various ways including from customers and from other banks in order to lend to customers (eg mortgages), businesses and sometimes other banks

[hc4361]

Banks borrow money to invest in high finance, too, trading in stocks, shares and commodities.
Bank A might borrow from B at 4%, hoping to trade at 8%, for example.

Or Bank A may not want to loan money to other countries to buy arms - so called ethical banking, but Bank B will borrow money from Bank A to do so.

A lot of it is a glorified form of gambling, really.