| This is an abbreviation for London Interbank Offered Rate, which is an average of various banks' interest rates. Each day at 11 a.m. (London time)
twelve of the most important internationally active banks that are members of the British Bankers' Association announce in London the interest rates at which they are borrowing funds from other banks on the market (or at which such funds are offered). Libor is often used as a reference rate, e.g. in mortgage agreements. For the purposes of steering the money supply, the National Bank sets a target range for three-month Libor in Swiss francs, i.e. for the three-month rate for Swiss franc investments on the London money market.
The Banking
Law specifies that banks must ensure that they have sufficient
liquidity. Liquidity includes minimum
reserves (including sight deposits
at the National Bank) and other liquid assets, including
easily marketable securities.
The National Bank uses its monetary policy instruments
to influence bank liquidity and hence interest rates on the
money market (money supply).
See special-rate repo transactions.
|
|  |
