What does CIBOR mean in STOCK EXCHANGE
CIBOR, or Copenhagen Interbank Offered Rate, is a reference rate at which the interbank market in Denmark offers to lend funds to one another in Danish krone. It is used as a reference rate by many financial institutions and corporations operating within Europe. CIBOR serves as the basis for many types of financial products and derivatives, such as floating interest rate swaps, futures contracts and options. In addition, it can be used to set the margin on certain loan payments and other types of mortgages.
CIBOR meaning in Stock Exchange in Business
CIBOR mostly used in an acronym Stock Exchange in Category Business that means Copenhagen Interbank Offered Rate
Shorthand: CIBOR,
Full Form: Copenhagen Interbank Offered Rate
For more information of "Copenhagen Interbank Offered Rate", see the section below.
What is CIBOR? CIBOR is an index that represents the average interest rate offered by leading banks for unsecured loans denominated in Danish krone over different maturities. The rates are calculated from surveys distributed to 10 banks in Copenhagen Stock Exchange's Financial Infrastructure division each business day at 11
00 a.m.. The rates are then weighted average of the responses from those banks and published on Copenhagen Stock Exchange's website around 11:15 a.m.. CIBOR rates remain generally stable but can fluctuate due to changes in market conditions such as liquidity, borrowing costs or credit risk levels.
Essential Questions and Answers on Copenhagen Interbank Offered Rate in "BUSINESS»STOCKEXCHANGE"
What is CIBOR?
CIBOR stands for Copenhagen Interbank Offered Rate. It is a benchmark interest rate that most major banks in the Copenhagen stock exchange base their interest rates on. It is used as a reference rate for financial products such as mortgages, deposits and loans in the Nordic market.
How is CIBOR calculated?
CIBOR is calculated by calculating the average interest rate offered by a panel of the leading participating banks in the Copenhagen Stock Exchange during daily money market operations around 11AM (CET) each day. The panel of banks consists of eight well-known Danish banks, including Danske Bank, Nordea, Jyske Bank and Sydbank.
Why is CIBOR important?
CIBOR represents the cost of interbank lending and therefore it impacts banking activity and how much individuals or companies will be charged to borrow from banks when obtaining a loan or mortgage. As a result, it has a big influence on broader economic activity within the Nordic Region.
What other rates does CIBOR correspond to?
There are two main versions of CIBOR; one applies to overnight borrowing (O/N), while another applies to borrowing over 1 week (1W). Additionally there are longer term equivalents extending up to 12 months (1M).
Who publishes CIBOR?
The Danish Financial Supervisory Authority (FSA) publishes the fixed official rate each day based on calculations made by Nasdaq Copenhagen.
When is CIBOR set?
CIBOR is set every weekday at 11AM CET time. On non-business days it remains static until the next business day when calculations are resumed again.
What currency does CIBOR apply to?
The primary currency associated with CIBOR is the Danish Krone, however other currencies such as Euros can also be calculated against it depending on demand and liquidity levels in these markets.
Are there any alternative rates for calculating interbank rates beyond those set by CIBOR?
In recent years alternative benchmarks have been introduced such as SONIA (Sterling Over Night Index Average) which offers an alternate approach to setting interbank borrowing costs over 1 week(1W) terms and more recently SOFR (Secured Overnight Financing Rate). These have been introduced due to concerns regarding potential manipulation of rates within LIBOR's short term financial instruments.
Final Words:
The Copenhagen Interbank Offered Rate(CIBOR) is an important reference rate utilized by financial institutions and companies operating within Europe and globally that rely upon its stability versus other benchmarks like LIBOR. Its most common use pertains to short-term loans denominated in Danish krone however its also employed in pricing derivative contracts such as interest rate swaps and options providing investors with various ways they can manage their exposure to fluctuations in borrowing costs or credit risk levels.