LONDON, June 18 (Reuters) - The British Bankers' Association said on Thursday it will change its definition of the London Interbank offered rate (Libor) to allow a greater number of institutions to participate in the daily rate fixing process.
Libor rates represent the average cost at which a panel of banks believe they can borrow funds for various periods of time in various currencies.
Currently the definition refers to rates formed in London. The amendment, to be announced and implemented by the BBA on Friday, will allow the submission of rates from banks participating in the London market but without a physical base in the city.
The change will allow the BBA to expand the number of banks contributing to its fixing panels and will also mean that banks that are for example, ceasing London operations, can continue to contribute, the BBA said.