General Question

ram201pa's avatar

What exactly is the Libor rate and how is it determined?

Asked by ram201pa (606points) May 14th, 2009

Thanks in advance for the answers. I know/hope there are some bankers out there who can help.

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3 Answers

Lightlyseared's avatar

It is a daily reference which is based on the rate that banks can borrow unsecured funds from other banks in the London market.

It is calculated by a company called Thomson Reuters each day at arround 11am and then is published just before noon. It is a benchmark rather than the actual tradable rate. The rate individual banks offer each other will vary.

As far as I know it is calculated from rates submitted by the individual banks.

Urban's avatar

London Interbank Offered Rate. Think of it like the 10 year bond for the U.S. Other than that, the above answer is dead on.

walterallenhaxton's avatar

A price that is a price for something that is not. Interesting.

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