30th May Results of BBA LIBOR Investigation at FinGad.com

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30th May Results of BBA LIBOR Investigation

Categorie: Currencies
Submitted 6 months ago by

Denese

Introduction The British Bankers’ Association’s (BBA) Libor rate is under review. BBA LIBOR was first developed in the 1980s as demand grew for an accurate measure of the real rate at which banks would lend money to each other. 16 contributor panel banks meet every morning and provide the rates at which they borrow 10 world currencies and 15 lending periods ranging from overnight to one year. The middle 50 per cent of these rates are taken to calculate an average, which, at 11am every morning is released to Reuters and which then become that day’s BBA LIBOR rate. The global credit problems have had repercussions on various markets, and particularly on the carry trade markets in foreign Exchange, but the most direct result was the surge in borrowing costs. When Libor rates did not appear to be accurately reflecting these rate hikes, the BBA became concerned and has decided to review the system that sets Libor. Julia Werdigier of the New York Times ... More...

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