Traditionally, in North American banking, prime rate basically was rate of interest charged by lenders to borrowers. The highest prime rate is not exactly known but it is believed that it occurred during the Great Depression.
The prime rate differs little between banks, and adjustments are normally made by the bank simultaneously, but this does not take place regularly. The current prime rate in America is said to be 8.25 per cent, on the basis of the statistics given out by the Federal Reserve Bank of Saint Louis. Where as the current prime rate of Canadian banks is said to be 6.00 per cent.
Normally, the prime rate functions roughly 300 basis points higher than the Federal Fund Rate, and the rate of interest charged by banks to each other for the purpose of overnight loans to accomplish reserve funding requirements.
The prime rate differs little between banks, and adjustments are normally made by the bank simultaneously, but this does not take place regularly. The current prime rate in America is said to be 8.25 per cent, on the basis of the statistics given out by the Federal Reserve Bank of Saint Louis. Where as the current prime rate of Canadian banks is said to be 6.00 per cent.
Normally, the prime rate functions roughly 300 basis points higher than the Federal Fund Rate, and the rate of interest charged by banks to each other for the purpose of overnight loans to accomplish reserve funding requirements.