LIBOR (London Interbank Offered Rate) - BBA LIBOR is the most widely used benchmark or reference rate for short term interest rates.
It is compiled by the BBA and released to the market shortly after 11.00 each day. LIBOR stands for the London Interbank Offered Rate and is the rate of interest at which banks could borrow funds from other banks, in marketable size, in the London market.
It was developed to provide a transparent, independent benchmark interest rate that could be used as a basis for determining interest rates on commercial loans. It is still used for this purpose, but is also now used as a basis for retail loans, including mortgages.
BBA LIBOR is considered shariah compliant by many Islamic scholars, and is therefore widely used in Islamic finance. BBA LIBOR is also as the basis for derivative contracts trading on CME Group, Euronext LIFFE and other derivative exchanges.
For more information please see the link below.