Libor - or the London Interbank Offered Rate - measures the rate at which banks borrow from each other.
Each day, a panel of banks set out what rates they think they can borrow from others over a range of periods - from overnight up to 12 months.
The data is collated, the top and bottom estimates are removed and the rest are then averaged to give a figure.
Libor is considered to be a key gauge of the financial system's health.
The Bank of England, the FSA, Barclays and the bank's ex-CEO Bob Diamond have been criticised by MPs investigating the Libor fixing scandal
MPs have produced a withering report on the Libor rate rigging scandal. The Bank of England and the FSA look particularly bad.