Little White Libor
The big problem with the Libor rate fixing scandal is that no one seems to be able to figure out who the victims were. Barclay’s has been fined $450 million and had to fire its top three executives. Four other big European Banks are now in the spotlight, and it won’t be long before Citi, JP Morgan and Bank of America follow them. Attorneys general around the US are trying to figure out whom they can prosecute for what. But they’re having a hard time because it isn’t obvious who, if anyone, got hurt.
Libor is the only interest rate I know of that is neither promulgated by a single institution (which is therefore accountable for it) nor based on actual transactions (which makes accountability moot). Instead, at 11:00 AM (GMT of course), a bunch of unnamed “contributor banks” selected by the British Banking Association call Thompson Reuters and report…
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