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Bank Prime Loan Rate |
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The interest rate that commercial banks charge their most creditworthy borrowers, such as large corporations. The Bank Prime Loan Rate has been at a record low of 3.25% for 20 months. |
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| BANK PRIME LOAN RATE - CHART 1947 to Present |
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| The interest rate that commercial banks charge their most creditworthy borrowers, such as large corporations. The Bank Prime Loan Rate has been at a record low of 3.25% for more thna 24 months. |
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Release Dates for Bank Prime Loan Rate are under:
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 INTEREST RATES - Federal Funds Rate |
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| BANK PRIME LOAN RATE |
What is it?
The interest rate that commercial banks charge their most creditworthy borrowers, such as large corporations. The Bank Prime Loan Rate has been at a record low of 3.25% for 20 months.
Why is it important?
Interbank borrowing is essentially a way for banks to quickly raise capital. For example, a bank may want to finance a major industrial effort but not have the time to wait for deposits or interest (on loan payments) to come in. In such cases the bank will quickly raise this amount from other banks at an interest rate equal to or higher than the Federal funds rate.
Raising the federal funds rate will dissuade banks from taking out such inter-bank loans, which in turn will make cash that much harder to procure.
Conversely, dropping the interest rates will encourage banks to borrow money and therefore invest more freely. Thus this interest rate acts as a regulatory tool to control how freely the US economy operates.
By setting a higher discount rate the Federal Bank discourages banks from requisitioning funds from the Federal Bank, yet positions itself as a source of last resort. |
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| DATA INFORMATION |
BANK PRIME LOAN RATE |
| SOURCE |
Federal Reserve Board of Governors |
| WEB |
www.federalreserve.gov |
| FREQUENCY |
Eight times a year |
| AVAILABILITY |
Late January, mid-March, late April, late June, mid-August, late September, early November, and mid-December |
| COVERAGE |
Not Applicable |
| REVISIONS |
Not Applicable |
| IMPORTANCE |
A - Very Important |
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