From Infrastructure L3 Switch Secure Technical Implementation Guide - Cisco
Part of Loopback address is not used as the iBGP source IP.
Using a loopback address as the source address offers a multitude of uses for security, access, management, and scalability. It is easier to construct appropriate filters for control plane traffic. Log information recorded by authentication and syslog servers will record the router’s loopback address instead of the numerous physical interface addresses.
Verify that the peering session with iBGP neighbors use the loopback address as the source address as shown in the example below: interface loopback 0 ip address 10.10.2.1 255.255.255.255 … router bgp 100 neighbor 200.200.200.2 remote-as 200 neighbor 188.20.120.2 remote-as 144 neighbor 10.10.2.2 remote-as 100 neighbor 10.10.2.2 update-source Loopback0 neighbor 10.10.2.3 remote-as 100 neighbor 10.10.2.3 update-source Loopback0
Configure the network device's loopback address as the source address for iBGP peering.
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