Libor is the major rate used to price debt stock. Libor is actually a set of several benchmarks that reflect the average interest rate at which large global banks can borrow from each other. There are a total of 150 Libor rates posted each day; interest rates are compiled for loans with 15 different maturities (or due dates) for each of 10 major currencies.

Each morning, just before 11 a.m. Greenwich Mean Time, a group of major banks are asked the rate at which they could borrow funds from other banks. The banks confidentially send their results for each of the 15 loan maturities - ranging from overnight to one year - to the market intelligence firm Thomson Reuters. The organization throws out figures in the highest and lowest quartile and averages the remaining half.

Thomson Reuters publishes the resulting Libor rates, as well as all the contributing rates that the banks provide, by noon each day. According to the British Bankers Association, these numbers appear on over 1 million trading screens around the world and in a wide variety of news sources. Any loans that are tied to one of the Libor indices - for example, a three-month U.S. dollar rate - will change in lockstep with the new figures.

  1. How did LIBOR come into use?

    Learn about the significance of the London Interbank Offered Rate, or LIBOR, and the history of how the daily LIBOR became ... Read Answer >>
  2. How does LIBOR compare to the Federal Reserve rate as an accurate indicator?

    Explore a comparison of the predictive efficacy of the Federal Reserve's fed funds rate and the Intercontinental Exchange's ... Read Answer >>
  3. Where on the internet can I find LIBOR rate information?

    Learn what the LIBOR is, which website provides general LIBOR information and which website provides ICE LIBOR data going ... Read Answer >>
  4. How can LIBOR be used as an economic indicator?

    Learn how the LIBOR is used, how it is calculated and how it can be used with Treasury bill rates to gauge the health of ... Read Answer >>
  5. Why is LIBOR sometimes referred to as LIBOR ICE?

    Learn what the LIBOR rate is, why there was a change in administration from BBA to IBA, and why LIBOR is often referred to ... Read Answer >>
  6. How did the LIBOR scandal affect interest rate swaps?

    Find out how the LIBOR scandal directly enriched some interest rate swap traders and harmed others by understating the real ... Read Answer >>
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  1. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate ...

    See LIBOR
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  4. LIBOR Curve

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  5. LIBOR Flat

    An interest rate benchmark used to establish the floating interest ...
  6. Fully Indexed Interest Rate

    The interest rate on an adjustable-rate loan that is calculated ...
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