LIBOR


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Related to LIBOR: Euribor

LIBOR

See: London Interbank Offered Rate

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

See London interbank offered rate.

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.

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Libor triggered a huge scandal in the wake of the financial crisis when workers at several banks were found to have rigged it for profit.
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Typical ARM mortgages today come in 'hybrid' form and carry level rates for their first five, seven or 10 year terms, after which they adjust based on movements in LIBOR. Although benchmark short-term rates have risen sharply this year, long-term rates have not moved as significantly.
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This Note argues that the alternative rates chosen by the United Kingdom and United States are positive changes from LIBOR. (17) These alternative reference rates will help keep banks more accountable because the rates are tied to transactional data and governed and reported by the central bank of each jurisdiction.
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The reason that Libor--and any move away from it--is such a big deal is that worldwide, at its peak, about $350 trillion worth (yes, that is $350 trillion) of financial products were priced against Libor. Any instrument with a floating rate of interest such as mortgages, loans, floating rate bonds or derivatives can carry an interest rate or coupon which is regularly reset at an agreed premium over (or theoretically discount to) Libor.
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has said it will replace Libor with Sonia, the Sterling Over Night Index Average, the rate at which U.K.
Libor's 2021 Demise Means More Work for Treasury
Andrew Bailey, head of the Financial Conduct Authority, said in London on Thursday that Libor isn't sustainable because of a lack of transactions providing data.
Libor's uncertain succession gives banks, markets a headache
The credibility of Libor as a benchmark was shaken after a scam in which it was allegedly manipulated by banks for their benefit.
Swiss National Bank to select Libor alternative soon
The move comes after Bank of England governor Mark Carney proposed scrapping Libor last week in favour of a widespread adoption of the Sterling Overnight Index Average (Sonia).
Libor past its sell-by date - FCA
The investigation found that between 2005 and 2009 traders at Barclays looked to boost their positions by asking Libor submitters to change their settings instead of basing Libor on the bank's borrowing costs.
Barclays settles with US states over rate-rigging scandal
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Barclays agrees USD100m Libor settlement

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