LIBOR

This Issue in United States

Concept of LIBOR in Futures Trading

In this context of financial law, the following is a definition of LIBOR: The London Interbank Offered Rate. The rate of interest at which banks borrow funds (denominated in U.S. dollars) from other banks, in marketable size, in the London interbank market. Some interest rate futures contracts, including Eurodollar futures, are cash settled based on LIBOR. Also see EURIBOR and TIBOR.

Libor

Concept of Libor in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The London Inter-Bank Offered Rate is the rate used when one bank borrows from another bank. It is the benchmark used to price many capital market and derivative (i.e. an instrument that transfers risk from one party to the other) transactions.

Resources

See Also

• Derivatives Contract