FIN 501 Lecture Notes - Lecture 10: Interbank, Euribor
20 Nov 2014
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10. 1 interest rate + money market rates. Prime rate basic rate on st loans that largest com. banks charge to most creditworthy corp customers. Discount rate rate fed offers to com. banks for overnight reserve loans. Bank rate rate boc offers to com. banks for overnight reserve loans. Federal funds rate rate banks charge each other for overnight loans of + million. Banker"s acceptance postdated check where bank has guaranteed payment ; used to finance international trade transactions. Call money rate rate brokerage firms pay for call money loans from banks. ; used as basis for customer rates on margin loans. Commercial paper st unsecured debt issued by largest corps. Cds rate on certificates of deposit (large-denomination of ,000+ at com. London interbank offered rate (libor) rate international banks charge one another for overnight eurodollar loans. Euribor rate also refers to deposits denominated in euros but based largely on rates from interbank market for eu banks.
