LIBOR
stands for London Interbank Offered Rate (pronounced LIE-bore). LIBOR is a daily
rate based on the interest rates at which banks lend unsecured funds to other
banks in the London wholesale interbank market.
LIBOR rates are widely used as a reference rate for financial instruments such
as:
-
interest rate swaps
-
floating rate notes
-
syndicated loans
-
adjustable rate mortgages
-
currencies, especially the US Dollar
LIBOR is published by the British Bankers Association (BBA) shortly after 11:00 each day, London time. The actual rate at which banks will lend to one another will, however, continue to vary throughout the day.
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