London Interbank Offered Rate (also Libor, Libor) is the daily fixed reference interest rate in the interbank market, the (GMT) is fixed from the main London internationally active banks of the British Bankers' Association on any working day at 11.00 clock time in London. The Libor is the interest rate at which banks take those funds from other banks in the market or get offered. Libor rates are therefore offering interest rates.
2012/13 resulted in manipulation of LIBOR for the so-called Libor scandal.
The reference rates Libor interest rates are the basis for a large part of financial market transactions. Among other things, some central banks to control its monetary policy through a Libor - intermediate target; for example, controls the Swiss National Bank 's monetary policy by means of a 3-month Libor target range.
The Libor is fixed for a very short way up to one year and monthly prices. For example, the current 3 -month LIBOR interest rate for a starting today over three months running money market business.
Libor rates are calculated for ten different currencies: the Australian dollar, the Canadian dollar, the Swiss franc, the Danish krone, the euro, the pound sterling, the yen, the New Zealand dollar, the Swedish krona and the U.S. dollar. The reference interest rate of the euro Libor but has a much less significant than the EURIBOR.
For the pound sterling is used as Actual/365 interest calculation method for all other currencies, actual 360. Depending on the currency of the Libor rate of 8, 12 or 16 different banks is fixed, only the middle 50 % are taken into account for the calculation.
As of 2012, it was revealed that the LIBOR had been manipulated.