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Zimmerman's Research Guide


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LIBOR Rate

LIBOR is short for "London Inter-Bank Offered Rate" which is an average of the rates at which the highest rated banks in London offer to lend to one another. The LIBOR comes in various currencies and maturities (usually 1, 3, 6 or 12 months) and is widely used as an interest rate index.

The British British Bankers Association publishes the BBA LIBOR rate daily, which is based on a survey of 16 banks' rates in 13 currencies at 11 a.m. London time. The BBA LIBOR is the LIBOR rate most commonly used as a benchmark for other rates. More detailed information about the BBA's LIBOR rate is posted on bbalibor.

Each day's LIBOR rate is made available shortly after their public release from MoneylineTelerate (Page 3750), Reuters (BBALIBORS)or Bloomberg (BBAM). Each day the Wall Street Journal publishes yesterday's BBA LIBOR rate as part of the Money Rates table in the "Money & Investing" Section, which is also posted on the Journal's Money Rates page. The BBA posts the current rate for the 3-month sterling LIBOR on the BBALIBOR Twitter page.

You can get historical LIBOR rates from bbalibor (covering 2 to 8 months ago) or old editions of the Wall Street Journal.

Even older LIBOR rates can be found in the International Financial Statistics Yearbook, published by the International Monetary Fund. The book is sold in print, on CD-ROM and online.

Fannie Mae issued its own LIBOR Index rate from 1989 until June 28, 2007. Fannie Mae posts the historical rates.

TED Spread: The TED Spread is the difference between the LIBOR rate and the interest rate on the U.S. Treasury Bill for the same maturity. Lower rates indicate confidence in the health of the credit markets (i.e., confidence that banks will pay back their short-term loans), which higher rates suggest problems with the credit markets (i.e., concern that banks may not be able to repay their short-term loans). The Spread has historically been about .5 percent; the Spread when to up 4.6 percent during the October, 2008 financial crisis. To get current and historical T-bill rates, see "United States Treasury Securities."


See Also
Banking
Interest Rates
Money Rates
United States Treasury Securities

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Copyright 2014 Andrew Zimmerman