Libor

The London Interbank Offer Rate (LIBOR) is the interest rate that banks charge other banks within the London interbank market to borrow money. It is the primary benchmark for short term interest rates around the world. LIBOR is officially fixed once a day by the British Bankers’ Association based on an average of actual rates from contributor banks for maturities ranging from overnight to one year. However, LIBOR then fluctuates throughout the day as banks agree large transactions, usually in eurodollars.

This definition is for general information purposes only