From Yahoo Finance: If you were shocked (shocked!) to
discover last summer that the LIBOR market was being rigged, prepare to be
flabbergasted: Regulators are investigating a number of global markets that
appear to be subject to manipulation.
“The probe of Libor manipulation is proving to be the tip of
the iceberg,” Bloomberg reports, noting that various regulators are
investigating markets including:
What all these markets have in common is a feature whereby
levels are set, at least in part, by prices submitted by traders using the
“honor system” vs. actual verified trades. As Henry Blodget and I discuss in
the accompanying video, it should really surprise no one that traders would
manipulate markets if given the opportunity because the motives to do so are so
compelling. And while these markets may seem arcane, they do have real world
impact: LIBOR is the global benchmark for interest rates, including those on
mortgages and auto loans, and Brent Crude is the global benchmark for energy
prices.
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