how the libid rate was used
until the rate fixing scandal both of these rates especially libor were considered the foremost global reference rates for short term interest rates of a variety of global financial instruments such as short term interest futures contracts forward rate agreements interest rate swaps and currency options libor was also a key driver in the eurodollar market and is the basis for retail products like mortgages and student loans they were derived from a filtered average of the world s most creditworthy banks interbank bid ask rates for institutional loans with maturities that range between overnight and one year the london interbank mean rate limean is the calculated average between libor and libid and could be used to identify the spread between the two rates limean was also used by institutions borrowing and lending money in the interbank market rather than using libor or libid and it was a reliable reference to the mid market rate of the interbank market 