伦敦银行同业拆借利率名词解释

LONDON InterBank Offered Rate (LIBOR) refers to the interest rate at which banks borrow funds from each other in the London interbank market. It is considered as the benchmark interest rate for short-term interbank lending internationally. In this article, we will dive into a detailed explanation of LIBOR and its significance in the financial industry.

1. What is Interbank Borrowing?

Interbank borrowing refers to the practice where financial institutions lend and borrow funds among themselves for short-term liquidity needs. It is a common activity in the banking sector and helps in balancing cash flows and managing liquidity requirements. The duration of interbank borrowing ranges from overnight to one year, with varying interest rates.

2. The Concept of LIBOR

LIBOR, also known as the London InterBank Offered Rate, is an interest rate at which banks offer to lend funds to each other in the London interbank market. It serves as a reference rate for various financial transactions, including derivatives, loans, mortgages, and financial products.

3. Calculation and Publication of LIBOR

LIBOR is calculated and published daily by Intercontinental Exchange (ICE) based on the submissions received from a panel of major banks. These banks provide their estimated borrowing costs for different currencies and durations. The submitted rates are then averaged, and LIBOR rates are determined for multiple currencies and maturities.

4. Significance of LIBOR

LIBOR plays a crucial role in the financial industry due to its widespread use as a benchmark rate. It is used to determine interest rates for a range of financial products, including loans, mortgages, derivatives, and other investments. Additionally, it serves as an indicator of the health and stability of the banking sector.

5. LIBOR Scandal and Transition

The LIBOR scandal emerged in 2012 when it was discovered that banks were manipulating LIBOR rates for their benefit. This scandal raised concerns about the integrity and reliability of LIBOR as a benchmark rate. As a result, global regulators and industry stakeholders initiated efforts to transition to alternative reference rates, such as the Secured Overnight Financing Rate (SOFR).

6. Transition from LIBOR to Alternative Rates

The transition from LIBOR to alternative rates involves significant challenges and impacts various areas, including contracts, systems, and risk management. Regulators and market participants have been working towards a smooth transition by developing alternative rates, establishing protocols for legacy contracts, and enhancing market infrastructure.

7. Future of LIBOR

As the financial industry is moving away from LIBOR, the future of LIBOR remains uncertain. However, the transition process is expected to be completed by the end of 2021, and the focus will shift towards using alternative reference rates in financial transactions.

In conclusion, the London InterBank Offered Rate (LIBOR) serves as a benchmark interest rate for interbank borrowing in the London interbank market. It has been widely used in the financial industry for various purposes but is now being phased out due to concerns over its integrity. The transition to alternative reference rates marks a significant change in the financial landscape and requires careful consideration and planning by market participants.