A document dump from the Federal Reserve Bank of New York
earlier today indicates one thing: the Federal Reserve, the Bank of England,
and the British Bankers Association knew that traders were misreporting the
data used to calculate one of the world's most important financial benchmarks
for years, BusinessInsider reports.
And there are a few really good reasons they did nothing.
The London Interbank Offered Rate (LIBOR) serves as the
benchmark rate for lending in dollars across the world, serving as the basis
for mortgage rates, credit cards, commercial loans, financial derivatives—you
name it.
Every day, 18 banks from around the world tell Thomson
Reuters the price they would pay to borrow money. Thomson Reuters compiles that
data, cutting off the highest and lowest four rates submitted, and the BBA publishes
a composite LIBOR number.
Documents published by the NY Fed today cite discussions in
which traders admitted they were not reporting accurate borrowing rates…..
Read more:
http://www.businessinsider.com/central-banks-knew-about-libor-manipulation-for-yearsheres-why-they-didnt-do-anything-2012-7#ixzz20Wk4Vx9y
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