What is LIBOR, and Why is it Going Away? 1/4  BIS central bankers' speeches  LIBOR was intended to be a measure of the average interest rate at which large banks can borrow in wholesale funding markets for different periods of time, ranging from overnight to one month, three months, and beyond.
LIBOR is an unsecured rate, which means that it measures interest rates for borrowings that are made without collateral and therefore include some credit risk. At first blush, it may seem peculiar that a borrowing rate for banks in London has been used so widely. Why, for example, are more than $ trillion of residential mortgages in the United States tied to LIBOR?