Base rate and GLP: Difference between pages

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1. ''Reference rates''
''Sustainability''.


Generally, a base rate is a widely recognised and quoted interest rate - such as the Fed funds rate, the prime rate, or LIBOR - by reference to which a rate of interest is calculated.  
Green Loan Principles.


More properly, these are a "reference rate" or a "benchmark rate". These terms avoid confusion with Base Rate (see below).
A voluntary framework for green loans, issued by the Loan Market Association (LMA).  
 
For example, in the phrase ‘LIBOR plus 50 basis points’, LIBOR is the base (reference) rate.
 
 
2. ''Central bank rates''
 
More particularly, a central bank rate may be known as Base Rate. 
 
This is normally the rate at which the central bank will lend overnight funds, commonly of a secured basis, to financial institutions.
 
By changing this Base Rate, the central bank may hope to influence market rates generally. It seems that anticipated changes to Base Rate are one of the largest influences on movements in general market interest rates between actual Base Rate changes<ref>Paul Mizen and Boris Hofmann [http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/2002/wp170.pdf "Working Paper No 170: Base rate pass-through: evidence from banks' and building societies' retail rates"], London, 2002, ISSN 1368-5562. Retrieved on 21 July 2014.</ref>.
 
 
Base Rates, if secured, are like the [http://www.federalreserve.gov/monetarypolicy/discountrate.htm discount rate] applied to loans to eligible institutions from the US Federal Reserve Banks under the primary credit program of their "discount window".




== See also ==
== See also ==
* [[Alternate Base Rate]]
* [[Green Bond Principles]] (GBP)
* [[Benchmark]]
* [[Green loan]]
* [[Forward guidance]]
* [[Green Loan Principles]]
* [[LIBOR]]
* [[Loan Market Association]] (LMA)
* [[Official Bank Rate]]
* [[Sustainability]]
* [[Reference bank]]
 


==References==


<references />
==External link==
[http://www.lma.eu.com/application/files/8415/2162/5092/LMA_Green_Loan_Principles_Bookletpdf.pdf?utm_medium=email&utm_campaign=Press%20Release%20The%20LMA%20publishes%20Green%20Loan%20Principles&utm_content=Press%20Release%20The%20LMA%20publishes%20Green%20Loan%20Principles+Preview+CID_51b125e77a2eaf285bacd35d7e340a3a&utm_source=Campaign%20Monitor&utm_term=View%20Green%20Loan%20Principles LMA summary of Green Loan Principles]


[[Category:Manage_risks]]
[[Category:Financial_products_and_markets]]

Revision as of 10:29, 23 April 2023

Sustainability.

Green Loan Principles.

A voluntary framework for green loans, issued by the Loan Market Association (LMA).


See also


External link

LMA summary of Green Loan Principles

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