The London Interbank Offered Rate, better known as LIBOR, ended the week of May 22nd down 17 basis points driven not only by increased confidence in Banks, but also growing customer deposits. The LIBOR rate is derived from a survey conducted by the British Banker’s Association requesting banks to provide details regarding cost to lend to each other for 15 different periods across several currencies.
Why is LIBOR so significant? LIBOR is used to set borrowing costs on about $360 trillion of financial products globally. When LIBOR rate goes down the cost of bank borrowing is reduced.
Is this a sign that the world economy may be on the mend? Perhaps. Clearly this is a sign that credit is thawing and banks are beginning to lend to each other again.
Why is LIBOR so significant? LIBOR is used to set borrowing costs on about $360 trillion of financial products globally. When LIBOR rate goes down the cost of bank borrowing is reduced.
Is this a sign that the world economy may be on the mend? Perhaps. Clearly this is a sign that credit is thawing and banks are beginning to lend to each other again.
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