The London Interbank Oered Rate (LIBOR) is used in the calculation of interest and other payments under many financial contracts, including loans, derivatives, bonds and agreements for other financial transactions, both in the U.S. and abroad.
LIBOR is a set of benchmark interest rates that provide an indication of the average rates at which panel banks could borrow wholesale, unsecured funds from each other for set periods in particular currencies. It is calculated and published daily by the IBA based on submissions from a panel of banks. It is published across a range of currencies (USD, GBP, EUR, JPY and CHF) and maturities (overnight, one week, one month, two months, three months, six months and one year). Globally, LIBOR has been used for decades as the primary benchmark rate for these short-term rates.
Approximately $200 trillion in outstanding financial contracts were tied to LIBOR globally as of March 2020.