It was establish in 1986 by BBA (British Banks’ Association)

 It has 5 types of Stakeholders.

 It has total members 223.
 64 nations represented LIBOR.
 It has 15 types of Maturities.
Panel Banks: Panel banks are the contributor banks of LIBOR.

SELECTION of PANEL BANKS:

The Selection is made every year by the ICE Benchmark Administration (IBA) with assistance from the Foreign
Exchange & Money Markets Committee.

Contributor banks have been selected for currency panels in line with three guiding principles:

1. Scale of market activity

2. Credit rating

3. Perceived expertise in the currency concerned

 A panel is made up for each currency consisting of at least 8 & a maximum of 16 banks which are deemed to
be representative for London money market.
 Thomas Reuters: Thomas Reuters is the designated calculation agent for BBA (British Banks’ Association)
LIBOR. Data Submitted by panel banks into the BBA LIBOR process is received & processed by Thomson
Reuters & the data is calculated using guidelines provided by the “LIBOR Panel Banks & Users Group”.
 Each LIBOR contributor bank has an application installed allowing that institution to Confidentially submit
rates which links directly to a rate setting team at Thomson Reuters.
 A bank cannot see other contributor rates during the submission window – this is only possible after final
publication of the BBA LIBOR data.
 Thomson Reuters run a collection of automated & manual tests on the submitted rates before they are sent to
the calculation engine, & after calculation the data is released to the market via Thomson Reuters & other
Licensed Vendors. (the financial press, including the wall street journal & financial times publish
BBALIBOR data from the previous day & Bloomberg etc).
Banks Submit their rates 1% 2% 3% 4%

The top & bottom quartiles are discarded 1% 2% 3% 4%

An average is calculated of the remainder 2.5%