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Quarterly Newsletter - Summer 2012


Libor or should that be Lie-bor?

Libor, in simple terms, is the estimated interest rate at which banks lend to each other.  It comes under the aegis of the Financial Services Authority (FSA) and, more specifically, the British Banking Association (BBA).  Various leading banks submit their costs for borrowing unsecured funds to Thomson Reuters (one of the world's leading sources of information for businesses and professionals), and Thomson Reuters work out an average rate which is published daily after 11am.  The Libor rate is important as it serves as a basic reference for all sorts of financial instruments, such as variable rate mortgages, future contracts, various currency deals, interest rate swaps and all kinds of loans.

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