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So why not make the change explicitly? I'm not against a change in the rate of LIBOR, nor am I against people making profits, as long as it's done fairly.
by blowski 10y ago
So why not make the change explicitly? I'm not against a change in the rate of LIBOR, nor am I against people making profits, as long as it's done fairly.
- cm2187 10y agoAgain, not profits, collapse of the financial system. The problem was: how do you combat fear? The LIBOR submissions were pretty transparent and investors were using it as a way to guess which banks would be the next to fail. I guess the BoE either thought they needed a short term solution / didn't have the time or appetite to change the way LIBOR was submitted. Or they thought that if they were hidding individual bank submissions (which they ultimately did), it would only aggravate fear.
- branchless 10y agoNo this is warped. They put profits before stability, then needed low rates forever, then had to lie again.
- al452 10y agoThe LIBOR rates were constructed by the BBA phoning around the banks, and reporting an average of the numbers they came up with. How would the BoE "explicitly" change that? By telling the BBA to lie? I don't imagine you'd find that "fair".
- cm2187 10y agoYeah but they could have requested the BBA not to publish individual contributions. I guess they thought it wouldn't have been enough.