LIBOR


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Related to LIBOR: Euribor

LIBOR

London Interbank Offer Rate

The interest rate participating banks offer to other banks for loans on the London market. LIBOR is the most widely used benchmark for short term interest rates in the world, primarily because most of the world's largest borrowers borrow money on the London market. Because it is so prominent, it is often used in other transactions, such as swaps. For example, an interest rate swaps may give the floating rate as "LIBOR +/- X base points." It is set each day by the British Bankers Association, which calculates it by averaging short term, inter-bank, deposit interest rates among the most creditworthy banks. See also: EURIBOR.

LIBOR

LIBOR (London Interbank Offered Rate)

the INTEREST RATE on dollar and other foreign currency deposits at which larger banks are prepared to borrow and lend these currencies in the EUROCURRENCY MARKET. The LIBOR rates reflect market conditions for international funds, and are widely used by the banks as a basis for determining the interest rates charged on dollar and foreign currency loans to business customers.

LIBOR (London Interbank Offered Rate)

the INTEREST RATE on dollar and other foreign currency deposits at which larger banks are prepared to borrow and lend these currencies in the EUROCURRENCY MARKET. The LIBOR rates reflect market conditions for international funds and are widely used by the banks as a basis for determining the interest rates charged on dollar and foreign currency loans to business customers.

LIBOR

(pronounced “lie-bore”) London Interbank Offered Rate.The rate that European banks use to charge interest to each other on large loans.LIBOR is used as an index for many commercial loans in the United States,rather than a reference to the prime rate.Often quoted as something similar to “135 basis points over 1-year LIBOR,”so that if LIBOR on 1-year loans is currently at 5.66 percent,then the quoted loan rate for the customer will be 5.66 percent plus 1.35 percent,or 7.01 percent.

References in periodicals archive ?
A It reduced its fees by around PS4million but, unlike Libor rate rigging, there is no evidence those involved personally benefited.
The rationale for the wide usage of LIBOR in contracts stems from its construction.
The process of setting the Libor came under scrutiny after Barclays admitted in June 2012 that it had submitted false information to keep the rate low.
The appointment "is an important step in enhancing the integrity of Libor" said Martin Wheatley, chief executive of Britain's Financial Conduct Authority, which has regulated Libor since April.
Libor is considered one of the most important figures in finance, governing the rates at which banks are prepared to lend to each other in the wholesale money markets.
Libor is calculated from the self-reported, unsecured borrowing costs of 18 large international banks operating in London.
The Chancellor tasked Mr Wheatley with reviewing the Libor process in July following Barclays' PS290m fine for rate-rigging.
The proposal to restructure the Libor has come about after the Libor rigging scam came to light.
It will examine how Libor - the benchmark interest rate for trillions of financial contracts including some mortgages - is calculated and regulated.
The paper also discusses introducing criminal sanctions against those attempting to manipulate Libor, but warns this would be difficult for the regulator to do.
WesCorp tied its pricing of certificates to Libor and a lot of credit unions priced off WesCorp rates," he said.
Yet even with these precedents, the Libor scandal still manages to shock.