key rate in international bank lending. LIBOR is the rate at which major banks in London are willing to lend Eurodollars to each other. It is used to determine the interest rate charged to creditworthy borrowers. LIBOR rates, based on daily quotes at 11 A.M. (London time) from five major London banks, are fixed rates quoted for specific maturities. The lending rate in the Euromarkets (LIBOR) and the borrowing rate (LIBID), are quoted for the U.S. dollar and other Eurocurrencies, generally for fixed-term borrowings. Actual rates can vary because different reference banks are used. Syndicated Eurocredits facilities, such as Revolving Underwriting Facilities (RUFs), underwritten by several Eurobanks, are quoted as spreads above LIBOR.
rate that the most creditworthy international banks dealing in eurodollars charge each other for large loans; Eurodollar equivalent of the federal funds rate. The LIBOR rate is usually the base for other large Eurodollar loans to less creditworthy corporate and government borrowers.
rate that the most creditworthy international banks dealing in eurodollars charge each other for large loans. The LIBOR rate is usually the base for other large Eurodollar loans to less creditworthy corporate and government borrowers. For instance, a Third World country may have to pay one point over LIBOR when it borrows money.
