| An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is a result of a blended average of the world's most creditworthy bank's interbank deposit rates for larger loans with maturities ranging from 1 day and a full 12 months.
There are various separate LIBOR rates popularly used as ARM indexes: 1-month, 3-month, 6-Month, and 1-Year LIBOR. The most commonly used is the 6-Month LIBOR. |