LIBOR

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The LIBOR (London Interbank Offered Rate), is an index that is tied to interest rates in London. It is a popular index to be used in some United States adjustable rate loans.

The LIBOR was noticed more in 2007 with the United States housing market and loan difficulties. Although the rates in the United States weren't changing much, the LIBOR, based on conditions in Europe, had gone up considerably (from 1.5% at the start of 2004 to 4.8% by the end of 2005) and caused extra difficulties for consumers who saw their interest rates rising to unexpected levels and didn't realize it wouldn't mirror the US market.[1].

References

  1. http://www.hsh.com/indices/fnmalibor-2003.html

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