Libor

[Ima saver]

I know I am the oldest regular poster on here and probably not too bright, but could someone explain "libor" to me?

[tripods68]

LIBOR stands for London Interbank Offered Rate.

The British Bankers’ Association calculates LIBOR in an open manner each business day. LIBOR rates are generally released around 11am London time. Many LIBOR rates exist, for various multiple short-term periods in a number of currencies. For example, each day LIBOR rates are released, there is a 1 week Japanese Yen LIBOR rate, a 1 month US dollar LIBOR rate, and 6 month Euro LIBOR rate. LIBOR is the primary benchmark for interest rates around the world. Interest rate contracts traded on many exchanges around the world, such as the Chicago Board of Trade, settle based on LIBOR. LIBOR affects consumers, too, as LIBOR is often used as a benchmark for ARMs and other credit products.

LIBOR Definition - What is LIBOR?

[Broken Arrow]

Don't be silly, Ima. You're the brightest of us all here.

Besides the technical definition, LIBOR is just a basic way to gauge how much confidence other countries' banks (in this case, Great Britain) have in lending money to us. The higher the rate, the riskier they think we are to them. LIBOR isn't the only one, but like the Dow, it's the most common one we look at.

The good news is that LIBOR seems to be responding to all the government actions well, and the rate has been steadily decreasing. Perhaps the wost of this economic storm is finally behind us?

[Ima saver]

Thank you all so much. Now I understand!!