London Interbank Offer Rate


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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.
References in periodicals archive ?
The proposed funding will be provided for a period of up to seven years and the interest will be linked to the London interbank offer rate (LIBOR).
Prime rate or the London Interbank Offer Rate (LIBOR) index," he noted.
Loans are typically priced at a spread over LIBOR (the London Interbank Offer Rate), or a spread over the prime rate.

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