LIBID: Difference between revisions
imported>John Grout (To update glossary when revising LIBOR entry) |
imported>Doug Williamson (Past tense.) |
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Formerly and informally a guess at the interest rate at which large banks of good credit standing might be expected to offer to lend to other such banks in the London inter-bank short-term, unsecured money market at a particular time and in a particular currency. Use of this term is deprecated. | Formerly and informally a guess at the interest rate at which large banks of good credit standing might be expected to offer to lend to other such banks in the London inter-bank short-term, unsecured money market at a particular time and in a particular currency. | ||
Use of this term is deprecated. | |||
LIBID was formed as a kind of analogy to LIBOR – originally an acronym for London Inter-Bank Offered Rate. | |||
One might expect LIBID to be a lower rate than LIBOR but as the term is informal such distinctions are blurred and conceptually a large bank of high credit standing is on both sides of a LIBOR-LIBID deal at the same rate. | |||
As there is no observed rate, informally LIBID is often taken as 1/8th % less than LIBOR. | As there is no observed rate, informally LIBID is often taken as 1/8th % less than LIBOR. | ||
In analogy with London Inter-Bank Offered Rate, LIBID is sometimes expanded as London Inter-bank Bid rate. | In analogy with London Inter-Bank Offered Rate, LIBID is sometimes expanded as London Inter-bank Bid rate. | ||
== See also == | == See also == | ||
* [[LIBOR]] | |||
* [[LIMEAN]] | * [[LIMEAN]] | ||
[[Category:Manage_risks]] | |||
Latest revision as of 10:43, 5 June 2018
Formerly and informally a guess at the interest rate at which large banks of good credit standing might be expected to offer to lend to other such banks in the London inter-bank short-term, unsecured money market at a particular time and in a particular currency.
Use of this term is deprecated.
LIBID was formed as a kind of analogy to LIBOR – originally an acronym for London Inter-Bank Offered Rate.
One might expect LIBID to be a lower rate than LIBOR but as the term is informal such distinctions are blurred and conceptually a large bank of high credit standing is on both sides of a LIBOR-LIBID deal at the same rate.
As there is no observed rate, informally LIBID is often taken as 1/8th % less than LIBOR.
In analogy with London Inter-Bank Offered Rate, LIBID is sometimes expanded as London Inter-bank Bid rate.
