LIBOR is the rate that banks charge other banks for short-term loans. These loans can be for one month, three months, six months and one year. When LIBOR rates are high, this is a sign that banks don't trust each other and will result in higher loan rates across the board. This means tighter lending standards and a general unwillingness among banks to take on risk.
Source: http://www.investopedia.com/articles/economics/08/credit-crisis-indicators.asp
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