Posted in Finance, Accounting and Economics Terms, Total Reads: 723
Definition: Libor Flat
LIBOR or London Interbank Offered Rate are interest rates which definte the banking system in UK. LIBOR is the calculated mean rate of interest by each bank, which other banks can charge if they boorowed from them.
LIBOR flat is the pre-determined rate of interest which helps in calculating the floating interest. The payment to be done on the principal in case of an interest rate swap, is done while taking into consideration the LIBOR flat.
LIBOR flat is the popularly used as a threshold on which other interest rates are derived from. The most useful rate of interest available in the banking industry is also determined when a no spread is added to LIBOR flat.