BSBY is a proprietary index created by Bloomberg that addresses the market need to manage the spread between bank funding costs and loan interest. Calculated from the aggregated anonymized transaction data from Bloomberg’s electronic trading platform, BSBY includes a systematic credit spread in its rate for effective use within the lending space. Since BSBY is based on transactions of instruments used by banks to fund themselves, it includes a systemic credit spread in its rate and can be used as a supplement to SOFR in the lending market.