1, London Interbank Offered Rate (LIBOR) is the interest rate required by large international banks when they are willing to borrow from other large international banks. This is the interest rate involved when commercial banks trade dollars deposited in non-American banks in the London interbank market. LIBOR is usually used as a benchmark for commercial loans, mortgages and debt issuance. At the same time, the interest rate of floating rate long-term loans will also be determined on the basis of LIBOR. LIBOR is also the reference interest rate for many contracts.
2. The formation mechanism of 2.LIBOR is as follows. Every day, BBA (British Bankers Association) asks 65,438+08 major banks. The question is what do you expect the interbank lending rate to be today? Then remove the four highest values and four lowest values, and the average of the remaining 10 values is today's LIBOR. From the formation mechanism, LIBOR is asked, not traded. The financial trading market that most people see is the A-share market. There is a perfect electronic trading system behind the stock market, and every transaction is recorded. However, unlike the stock market, the interbank market is mainly a one-to-one relatively private transaction. Third parties other than the two parties generally don't know the details of the transaction, and there is no information platform behind it to register and count the transaction data, so many things in the interbank market can only be asked one by one. That's what LIBOR asked.
When it comes to interest rate, I often say this word. This is BP, which is the abbreviation of basicpoint. In Chinese, it is usually called base point, which means one percent of a percentage point, that is, one ten thousandth, 0.01%; It is usually more common in the expressions of macroeconomics and financial industries. The benchmark interest rate has increased by 25 basis points, that is, the benchmark interest rate has increased by 0.25%. The bank's pricing method for deposit and loan interest rates has changed from floating to adding points, and from multiple floating to base point floating. According to the original floating mode of the bank, the final execution interest rate should be based on the basic interest rate, and the interest rate should float by multiple. For example, if the base interest rate is 3% and the bank floats 40%, then the final execution interest rate is 3%*( 1+40%)=4.3%, and the floating method here is to float 0.4 times on the original basis.
After the bank reform, the final execution interest rate of bank deposits and loans will be added to the basic interest rate. For example, if the base interest rate is 3% and the floating interest rate of the bank will increase by 0.4 percentage point, then the final execution interest rate is 3%+0.4%=3.4%. The floating method here is to directly increase the percentage point on the original basis.