Editing Libor (section)

==Scope==
Libor was widely used as a reference rate for many financial instruments in both financial markets and commercial fields. There were three major classifications of interest rate fixings instruments, including standard inter-bank products, commercial field products, and hybrid products that often used Libor as their reference rate.<ref>Wilson F. C. Chan (June 2011). "An Analysis of the Relationship between Choice of Interest Rate Reference & Interest Rate Risks of Corporate Borrowers", page 12. {{cite web |url=http://lbms03.cityu.edu.hk/theses/c_ftt/dba-cb-b40856562f.pdf |title=Archived copy |access-date=2012-07-22 |url-status=live |archive-url=https://web.archive.org/web/20130224020655/http://lbms03.cityu.edu.hk/theses/c_ftt/dba-cb-b40856562f.pdf |archive-date=24 February 2013 |df=dmy-all }}</ref>

'''Standard interbank products''':
*[[Forward rate agreement]]s
*[[Interest rate future]]s, e.g. [[Eurodollar]] futures
*[[Interest rate swap]]s
*[[Swaption]]s
*[[Overnight indexed swap]]s, e.g. Libor–OIS spread
*[[Interest rate option]]s, [[Interest rate cap and floor]]

'''Commercial field products''':
*[[Floating rate note]]s
*Floating rate [[Certificate of deposit|certificates of deposit]]
*[[Syndicated loan]]s
*[[Variable rate mortgage]]s
*[[Term loan]]s

'''Hybrid products''':
*[[Range accrual]] notes
*Step up callable notes
*Target redemption notes
*Hybrid perpetual notes
*[[Collateralized mortgage obligation]]s
*[[Collateralized debt obligation]]s

In the United States in 2008, around sixty percent of [[prime rate|prime]] [[adjustable-rate mortgage]]s and nearly all [[subprime mortgages]] were indexed to the US dollar Libor.<ref name="Schweitzer, Mark and Venkatu, Guhan">{{Cite web|author1=Schweitzer, Mark|author2=Venkatu, Guhan|date=21 January 2009|title=Adjustable-Rate Mortgages and the Libor Surprise|publisher=Federal Reserve Bank of Cleveland|url=http://www.clevelandfed.org/research/commentary/2009/012109.cfm|archive-url=http://webarchive.loc.gov/all/20130503152959/http%3A//clevelandfed%2Eorg/research/commentary/2009/012109%2Ecfm|archive-date=3 May 2013|url-status=dead|df=dmy-all}}</ref><ref>{{Cite news|author=Matthews, Dylan|date=5 July 2012|title=Ezra Klein's WonkBlog: Explainer: Why the LIBOR scandal is a bigger deal than JPMorgan|newspaper=The Washington Post|url=https://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/05/explainer-why-the-libor-scandal-is-a-bigger-deal-than-jpmorgan/|url-status=live|archive-url=https://web.archive.org/web/20160610203049/https://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/05/explainer-why-the-libor-scandal-is-a-bigger-deal-than-jpmorgan/|archive-date=10 June 2016|df=dmy-all}}</ref> In 2012, around 45 percent of prime adjustable rate mortgages and more than 80 percent of subprime mortgages were indexed to the Libor.<ref name="Schweitzer, Mark and Venkatu, Guhan"/><ref>{{cite web|url=http://www.clevelandfed.org/research/trends/2012/0712/01banfin.cfm |title=Meet The Team |author=Research Economist |date=1 November 2013 |work=clevelandfed |url-status=dead |archive-url=https://web.archive.org/web/20121008035137/http://www.clevelandfed.org/research/trends/2012/0712/01banfin.cfm |archive-date= 8 October 2012 }}</ref> American [[Municipal bond|municipalities]] also borrowed around 75 percent of their money through financial products that were linked to the Libor.<ref name="fas.org">LIBOR: Frequently Asked Questions {{cite web |url=https://fas.org/sgp/crs/misc/R42608.pdf |title=Archived copy |access-date=2015-04-04 |url-status=live |archive-url=https://web.archive.org/web/20150924133524/http://www.fas.org/sgp/crs/misc/R42608.pdf |archive-date=24 September 2015 |df=dmy-all }}</ref><ref>{{cite news | url=https://dealbook.nytimes.com/2012/07/10/libor-rate-rigging-scandal-sets-off-legal-fights-for-restitution/ | work=The New York Times | first=Nathaniel | last=Popper | title=Rate Scandal Stirs Scramble for Damages | date=10 July 2012 | url-status=live | archive-url=https://web.archive.org/web/20170709103045/https://dealbook.nytimes.com/2012/07/10/libor-rate-rigging-scandal-sets-off-legal-fights-for-restitution/ | archive-date=9 July 2017 | df=dmy-all }}</ref> In the UK, the three-month British pound Libor was used for some [[variable rate mortgage|mortgages]]—especially for those with adverse credit history. The [[Swiss franc]] Libor was also used by the [[Swiss National Bank]] as their reference rate for [[monetary policy]].<ref>{{Cite web|url=http://www.snb.ch/en/mmr/speeches/id/ref_20090825_tjn_1/source/ref_20090825_tjn_1.en.pdf|archiveurl=https://web.archive.org/web/20110716100132/http://www.snb.ch/en/mmr/speeches/id/ref_20090825_tjn_1/source/ref_20090825_tjn_1.en.pdf|url-status=unfit|title=SARON® – An innovation for the financial markets|archivedate=16 July 2011|website=www.snb.ch}}</ref>{{unreliable source?|date=July 2015}}

The usual reference rate for [[euro]]-denominated interest rate products is the [[Euribor]], compiled by the [[European Banking Federation]] from a larger bank panel. A euro Libor did exist, but mainly for continuity purposes in swap contracts dating back to pre-[[Economic and Monetary Union of the European Union|EMU]] times. The Libor was an estimate, not intended for the binding contracts of a company. It was, however, specifically mentioned as a reference rate in the market standard [[International Swaps and Derivatives Association]] documentation, which were used by parties wishing to transact in over-the-counter [[interest rate derivative]]s.