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BBA LIBOR: overnight rate falls for second day

15 Aug 2007

Today's BBA LIBOR overnight sterling rate has fallen back for the second day running after three days of rising levels.

The rate struck at 12 noon today is 6.01 per cent, a fall from yesterday’s rate of 6.11875 per cent. The fall is further evidence that banks' immediate concerns about recent market movements are abating.

Their concerns about short-term volatility in the markets are allayed, although longer-term concerns about the impact of the sub-prime mortgage slump may remain.

The overnight sterling rate of BBA LIBOR is valuable because it is uniquely sensitive to changes in banks' risk assessments, which in volatile markets may change quickly.

BBA LIBOR (British Bankers' Association London Interbank Offered Rate) is a daily measure of the rate at which large banks will lend to each other in the London market. The rate for overnight borrowing in sterling is considered a particularly useful barometer of the UK banking sector’s attitude to risk in the financial markets.

If the rates are significantly above the interest rates as set by the central bank, or government, it indicates that lenders are more worried about defaults on loans. In recent days the rate has moved quite dramatically above the Bank of England base rate (currently 5.75 per cent):

  • Wednesday 8th August – 5.85 per cent
  • Thursday 9th August – 6.165 per cent
  • Friday 10th August – 6.475 per cent
  • Monday 13th August – 6.50 per cent
  • Tuesday 14th August – 6.11875 per cent
  • Wednesday 15th August – 6.01 per cent

For further information, please contact:
Press Office (020 7216 8989)
Press Office (Out of hours contact) (020 7216 8888)

Notes to Editors

This briefing is the third in an occasional series offered as a service to journalists while the current market volatility continues.

This is not a daily briefing: we will issue these statements only when there are significant movements in the BBA LIBOR overnight sterling rate.  On days on which we do not publish a note, you can access all BBA LIBOR rates either from the BBA press office or the information providers listed below.

The full name of this service is BBA LIBOR. The term LIBOR has been used erroneously to describe this industry standard, but as individual banks may calculate their own Libor rates, the term BBA LIBOR should be used to distinguish them.

The BBA permits the use of the logo for BBA LIBOR in appropriate circumstances, including media reports. You can download a copy of the logo from the link below.

Daily BBA LIBOR rates are published by Reuters and are available also through Thomson Financial, Telekurs, Bloomberg, Infotec, IDC, Quick, Class Editori and Proquote, as well as other information providers.

Historic BBA LIBOR rates are available from the link below.

Related Links

Historic BBA LIBOR rates (Internal Link)
BBA LIBOR Logo (External Link)

 
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