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LIBOR
The London InterBank
Offered Rate,
or LIBOR, is the annualized, average
interest rate at which a select group of large, reputable banks
that participate in the London interbank money market can borrow
unsecured funds from other banks. There are many different LIBOR
rates (maturities range from overnight to 12 months) for five currencies:
- CHF (Swiss Franc)
-
EUR (Euro)
-
GBP (Pound Sterling)
-
JPY (Japanese Yen)
-
USD (US Dollar)
In the United States, the most common LIBOR maturities used in pricing
loans -- 1, 3, 6 and 12 months -- can be found below.
Back in the mid-1980's, the world banking system adopted LIBOR
as a much needed benchmark for short-term, interbank loans. LIBOR
rates are now internationally recognized indexes used for pricing
many types of consumer and corporate loans, debt instruments and
debt securities across the globe. For example, LIBOR is used as
an index for a large percentage of adjustable-rate mortgages (ARM)
in The United States.
LIBOR rates are fixed every UK business day by the ICE Benchmark
Administration (IBA).
The Fed
Funds Target Rate, America's benchmark interest rate, and the
U.S. Prime Rate
are controlled by America's central bank: the U.S. Federal Reserve.
LIBOR rates, however, are not controlled or regulated by
England's central bank, or any other central bank for that matter.
Scroll down this page to read about how
LIBOR is fixed.
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Current
US Dollar LIBOR Rates§ |
| Maturity |
Rate
(%) |
| 1 Month LIBOR |
1.89826 |
| 3 Month LIBOR |
2.36156 |
| 6 Month LIBOR |
2.50938 |
| 1 Year LIBOR |
2.75844 |
| The above-listed LIBOR rates
were updated on April 19, 2018±. |
| The Current
US Prime Rate |
4.75% |
The Current
Target
Range for
the Fed Funds Rate |
1.50% - 1.75% |
Chart:
U.S. Prime Rate vs. Fed Funds Target Rate
vs. 1-Month LIBOR vs. 3-Month LIBOR
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How U.S. Dollar (Eurodollar) LIBOR Works
How does the IBA fix LIBOR rates denominated in U.S. dollars?
Just before 11:00 a.m. GMT, it polls a specific panel of highly
reputable, high-volume banks which participate in the London
wholesale money market. The IBA finds out the rate at which
each bank on the panel could borrow Eurodollars from other
banks, for specific maturities. The IBA figures out the trimmed
arithmetic mean for each maturity, then publishes these
rates at about 11:45 a.m. GMT. The American banks included
in the panel surveyed by the IBA for U.S. dollar fixing are:
- Bank of America N.A.*
- JP Morgan Chase Bank N.A.*
- Citibank N.A.*
There are 15 non-U.S. banks surveyed for U.S. dollar fixing
in London. These banks are:
- Bank of Tokyo-Mitsubishi UFJ Ltd
- Barclays Bank plc
- BNP Paribas SA*
- Credit Agricole Corporate & Investment Bank
- Credit Suisse AG*
- Deutsche Bank AG*
- HSBC Bank plc
- Lloyds TSB Bank plc
- Rabobank Intl CCRB (Cooperatieve Centrale Raiffeisen
- Boerenleenbank B.A)
- Royal Bank of Canada
- Société Générale*
- Sumitomo Mitsui Banking Corporation Europe Limited
- The Norinchukin Bank
- The Royal Bank of Scotland plc
- UBS AG
* = London Branch
A Eurodollar is a US dollar deposited in any bank outside
the United States.
For more on how
LIBOR works, click
here.
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| ±
= The table below lists Eurodollar bank holidays. |
|
|
| New
Year's Day |
January 1 |
| Martin
Luther King's Birthday § |
January 15 |
| President's
Day § |
February 19 |
| Good
Friday |
March 30 |
| Easter
Monday |
April 2 |
| Early
May Bank Holiday |
May 7 |
| Spring
Bank Holiday |
May 28 |
| Independence
Day § |
July 4 |
| Summer
Bank Holiday |
August 27 |
| Labor
Day § |
September 3 |
| Columbus
Day § |
October 8 |
| Veteran's
Day § |
November 12 |
| Thanksgiving
Day § |
November 22 |
| Christmas
Day |
December 25 |
| Boxing
Day |
December 26 |
|
| §
= No overnight Eurodollar LIBOR fixing. |
Current
LIBOR Rates |
LIBOR History | SITEMAP
International
Prime Rates | LIBOR
Rates Chart | Daily
LIBOR
Certificates
of Deposit | International
Prime Rates
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