The London Interbank Offered Rate (or LIBOR, pronounced /ˈlaɪbɔr/) is a daily reference

rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the
London wholesale money market (or interbank market). LIBOR will be slightly higher than the
London Interbank Bid Rate (LIBID), the rate at which banks are prepared to accept deposits. It is
roughly comparable to the U.S. Federal funds rate.

The London InterBank Offered Rate, or LIBOR, is the average interest rate charged when
banks in the London interbank market borrow unsecured funds from each other. There are
many different LIBOR rates for numerous currencies, including U.S. dollars. This page lists
LIBOR rates that are fixed for U.S. dollar-denominated deposits in the London wholesale
money market, also known as Eurodollars (Eurodollars are basically U.S. dollars that are
deposited in a non-U.S. bank, and are therefore not subject to regulation by the U.S.
Federal Reserve.) 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 the LIBOR as a much needed
benchmark for short-term, interbank loans. The 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, the LIBOR is the reference
interest rate for the vast majority of Interest-Only Loans in The United States.

LIBOR rates are fixed every UK business day by the British Bankers' Association ( BBA).

The Fed Funds Target Rate, America's benchmark interest rate, and the U.S. Prime Rate are
controlled by America's central bank: the Federal Reserve. The LIBOR rates, however, are
not controlled by England's central bank, or any other central bank for that matter.

Current LIBOR Rates §

Maturity Rate (%)

1-Month LIBOR 4.11

3-Month LIBOR 4.33375

6-Month LIBOR 4.13125

12-Month LIBOR 4.0575

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