London Interbank Bid Rate - Libid

Are you livid? If you’re not, either you’re not British...or LIBID is more your cup of tea.

LIBID (like LIBOR, if you’re familiar with that one) is a reference rate set by the banks in the London interbank market. While LIBID is a bid rate (the rate banks are bidding on eurocurrency deposits) LIBOR is the ask rate: the rate banks are willing to lend.

To be clear, eurocurrency deposits aren’t euros. They’re any currency (like the U.S. dollar) that’s deposited in any country except that currency’s country (like USD into European banks, or any non-U.S. bank).

LIBID...the London Interbank Bid Rate...is the less-popular child of the London interbank market, even though LIBOR and LIBID are two sides of the same coin. Still, LIBID is important since, like LIBOR, it’s a reference rate, meaning that it’s the basis for a bunch of other interest rates.

It’d be remiss of us not to mention the scandal that happened with LIBOR (and therefore kind of LIBID by default...and yes, this story will make you actually livid). These rates are supposed to be market rates, but it was revealed that banks were colluding to set these rates in their own favor (see LIBOR for more deets).