> My primary issue is with the fact that the Fed board of governors so quickly and easily chose it as the rate What are you talking about? LIBOR was a de facto

> My primary issue is with the fact that the Fed board of governors so quickly and easily chose it as the rate What are you talking about? LIBOR was a de facto standard because the market overwhelmingly chose to use it as the short rate by writing it into private counterparty contracts. The market could have easily settled into something else (right now it's moving towards Fed Funds and OIS rates). If you look at how the LIBOR rate is actually set, it's a trimmed average, meaning you poll something like 18 banks, then you discard the highest 4 and lowest 4. This is actually a good fraud-resistant design. The Fed had little directly to do with what index banks and other private counterparties chose to use with one another at the time.