What is the LIBOR Rate?
In the United Kingdom, the LIBOR rate is an important reference rate that is based on the rates of interest currently applied to loans extended to other banks in the greater London money market. Properly known as the London Interbank Offered Rate, this reference on interest rates is utilized for a number of different types of loan transactions between banking institutions. There are several financial instruments that are considered in the calculation of LIBOR rates. Among these are variable rate mortgages, floating rate loans, and short term futures contracts. The current activity regarding some foreign currencies, notably the United States dollar and the Euro, are also considered in determining the daily status of the LIBOR rate. The British Bankers Association provides a daily update on the current LIBOR rate. The information is normally released sometime between 11:00 a.m. and noon UK time, Monday through Friday. Data from sixteen different banking institutions is used to calculate
The LIBOR (an acronym for London InterBank Offered Rate) is an interest rate which serves as the benchmark for the interest rate that banks offer to one another. It is compiled by the British Bankers Association (BBA), and published every morning. Banks often loan each other money for temporary liquidity, and when they do so, they do it by the mutually agreed-upon LIBOR rate. The LIBOR also serves as a guideline to banks when they set interest rates for short-term interest rates on such products as adjustable-rate loans, mortgages, and credit cards. Typically, the bank adds a point or two to the LIBOR rate as their margin, before passing it on to the consumer. What this means to you is that, if you have an adjustable-rate loan, the amount of the current LIBOR rate will determine your new rate when your adjustable rate resets. Rises in the LIBOR interest rate will also have a general effect on the economy, reducing liquidity between banks, and making all types of consumer loans more exp
LIBOR is the interest rate that banks charge each other for one-month, three-month, six-month and one-year loans. LIBOR is an acronym for London InterBank Offered Rate. This rate is that which is charged by London banks, and is then published and used as the benchmark for banks rates all over the world.
The LIBOR stands for London Interbank Offered Rate. This is defined as a interest rate that is offered by banks on unsecured loans to other financial institutions in the London wholesale money market. The LIBOR will be a bit higher than the LIBID, London Interbank Bid Rate, the rate at which the banks are able to accept deposits at. This rate is approximately comparable to the U.S. Federal funds rate. This rate is crucial to banks on determining what there profit margins are going to be on secured and unsecured lending.
