bank prime rate follows ..Bank of America and Wachovia Lower Prime Lending Rate

bank prime rate follows

Banks in the United States quickly followed suit. Bank of America and Wachovia Bank both lowered their prime lending rates by a half point to 4.5%. The prime lending rates are usually used in auto and home equity loans.

Prime rate, or Prime Lending Rate, is a term applied in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility, though this is no longer always the case. Some variable interest rates may be expressed as a percentage above or below prime rate.
The prime rate, as reported by the Wall Street Journal's bank survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the fed funds rate, which is set by the Federal Reserve. The COFI (11th District cost of funds index) is a widely used benchmark for adjustable-rate mortgages.