The London Interbank Offered Rate (LIBOR) is the weighted average rate for interbank loan offers between banks operating on the London Stock Exchange.
London Interbank Offered Rate (LIBOR)
LIBOR features
LIBOR rates are calculated in ten different currencies with fifteen maturities. Between 8 and 16 banks, selected by the regulators of the British Banking Association (BBA) and the Foreign Exchange and Money Markets Committee (FX & MMC), participate in the calculation of each of the 150 rates.
LIBOR advantages
In fact, LIBOR is the most important indicative rate in Europe and has several important advantages:
- This is the main indicator of interbank loans.
- Can be used for a long time.
- No strict booking requirements.
- A clear and simple calculation mechanism.
- Used in a wide range of banking products.
- Online monitoring of changes and incoming data.
- Many currencies and different terms are used.
- The banks that make up the rate are the most reliable and largest.