IBORkorot

IBORkorot is a term used to describe the unique method of calculating interest on savings accounts or certificates of deposit in the context of international banks. It is a system developed by international banks to calculate interest on savings accounts or certificates of deposit for their customers, usually those involved in cross-border transactions.

The IBORkorot system is based on the London InterBank Offered Rate (LIBOR) which is also a reference rate for short-term interest rates. However, the IBORkorot method can vary depending on the international bank or financial institution and the specific terms of the account. The method involves calculating interest by referencing the IBOR rate for a specific currency, usually the US dollar.

IBORkorot was largely used before the 2008 financial crisis and is now mostly considered an outdated method of calculating interest on cross-border transactions. The method has been criticized as being opaque and not providing sufficient transparency to customers about how their interest is being calculated. The lack of transparency has been a point of contention among financial regulators and consumer advocacy groups.

Despite its widespread use in the past, many international banks have abandoned IBORkorot in recent years and replaced it with other more transparent methods of calculating interest. The UK's Financial Conduct Authority has also announced plans to phase out the use of LIBOR in financial contracts after 2021.

Overall, IBORkorot remains an important aspect of the history of international banking, highlighting the complexities and controversies of cross-border financial transactions. However, its limited use today and decreasing reliance on LIBOR rates indicate its diminishing importance in the modern financial landscape.