Understanding BBA LIBOR

27 May 2010

The BBA has reissued its popular factsheet Understanding BBA LIBOR, with a comparison of trends in recent years to offer some perspective on current trends.

Because BBA LIBOR rates are calculated daily from the rates at which banks agree to lend each other money, it is accepted as an accurate barometer of how global markets are reacting to prevailing market conditions.

Throughout late 2009 and early 2010, LIBOR rates decreased to historical lows. They have now begun to rise again, although they are still, relatively and absolutely speaking very low.

Nevertheless, any upward trend inevitably leads one to wonder whether the markets are headed back into stressed times.

The new edition of this factsheet aims to put the current rises into perspective.