London Inter-Bank Offer Rate (LIBOR)

This is the interest rate at which London banks are willing to offer funds in the inter-bank market. LIBOR is an average of rates which a small number of major London banks are willing to lend $10 million for a period of three or six months. The rate is fixed daily by the British Bankers' Association by eliminating the highest and lowest offers from the selected banks and averaging the rest of the rates collected.