Lombard rate(redirected from Lombard Rates)
Applies mainly to international equities. Interest rate the German Bundesbank uses as an upper limit to the day-to-day money rate, since no bank will pay higher rates in the money market than it has to pay for very short-term recourse to Lombard credit.
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The interest rate the Deutsche Bundesbank charges other banks for collateralized loan obligations. Previously, the Lombard rate could be raised or lowered in keeping with Germany's monetary policy. However, since the euro came into being, Germany no longer controls its own monetary policy.
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The rate of interest at which the Bundesbank, Germany's central bank, lends funds to the country's commercial banks. The Lombard rate is an important indicator of Germany's monetary policy.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.