Who issues the LIBOR rate?

The LIBOR (London Interbank Offered Rate) is issued by the Intercontinental Exchange Benchmark Administration (ICE BA). This organization is responsible for calculating and disseminating the rates based on submissions from leading banks in the London interbank market. These submissions reflect the rates at which these banks believe they can borrow unsecured funds from one another. The process for calculating LIBOR involves collecting these submissions and then applying a formula to establish the average rates for different maturities and currencies.

This rate is crucial in financial markets as it serves as a benchmark for various financial products, including loans, derivatives, and securities. Its proper administration is vital for maintaining confidence in the financial system, which is why ICE BA's role is so significant, particularly following the reforms and regulatory changes that stemmed from past manipulation scandals. Understanding this structure helps comprehend how benchmark rates function in global finance and the importance of their integrity.