Benchmark

1.

A measure stated on a standardised basis, to enable comparison.

For example, an effective annual rate.

2.

A quantified standard of performance set by the market (such as stock market index) or by an institutional investor (such as an internally developed benchmark) against which investment performance, or other performance, can be managed and tracked.

3.

A standard of performance including less readily quantified measures, such as satisfaction.

4.

An officially published rate of interest, from which a rate of interest payable or receivable is calculated.

Historically, for example, LIBOR.

A related rate of interest payable might be LIBOR + 1%.

The Financial Stability Board (FSB) recommended in 2014 that stakeholders should identify risk-free rates that might be used as alternatives to LIBOR.

5.

A market price for a widely traded quality and quantity of a commodity, used as a reference price in a contract.

For example, the price per barrel of Brent crude oil.

See also

• Alternate Base Rate
• Baseline
• Base rate
• Benchmarking
• Benchmarks Regulation
• Effective annual rate
• €STR
• EURIBOR
• European Money Markets Institute
• Fallback
• Financial Stability Board
• Fixing
• Good practice
• LIBOR
• Price fixing
• Rate fixing
• Risk-free rates
• Spread to Treasury/ Governments
• Stakeholder

Other links

A World without Libor - FCA speech - July 2018