Libor

Libor

Published on 11 October 2021
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Transcript
00:00
What is Libor?
00:03
Libor is : -the acronym for London Interbank Offer Rate. -a benchmark interest rate that indicates the cost of borrowing for leading banks to borrow from one another.
00:11
LIBOR is based on ?
00:13
-the average interest rate calculated from estimates submitted by the member banks every day -5 currencies which include the U.S. dollar, the euro, the British pound, the Japanese yen, and the Swiss franc.
00:18
it provided seven maturities that included overnight, 1 week, 1 month, 2 months, 3 months, 6 months & 12 months.
00:25
So, it will have a total of 35 different LIBOR rates calculated and published on every business day.
00:34
LIBOR is frequently used by various financial instruments in both financial markets and commercial fields around the world.
00:37
such as interest rate futures, interest rate swaps, collateralized debt obligations, credit cards, mortgages, corporate loans, government bonds, and also student loans
00:43
The example that mentioned is for what ? It is used the LIBOR as the benchmark reference to determine the interest rate charges
00:52
Therefore, the LIBOR not only affected the financial institutions
00:57
It also affected the consumers around the world.