Sep 162018
 

one hundredth of one percent or 0.01% or 0.0001.  Basis points are used to refer to movements in measures that are relatively stable, such as the LIBOR rate or CDS spreads.

Saying that French bonds trade at 20 basis points above German Bunds means that the yield on French bonds is 0.2% higher than the German equivalent – reflecting their increased perception of risk.  Saying 20 basis points is much easier than saying 0.2%

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