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Some of the submissions may have been 30-40 basis points off (0.3-0.4%). "If you take this and multiply it by the $800 trillion, you start talking real money."
by Thrymr 14y ago
Some of the submissions may have been 30-40 basis points off (0.3-0.4%). "If you take this and multiply it by the $800 trillion, you start talking real money."
Ever since I first heard that LIBOR is set by voluntary submissions rather than actual data, I have wondered how that works. Now it's becoming obvious that it doesn't.
- walru 14y agoWell the way it's supposed to be set is by averaging out what the '16' banks are charging each other, or more specifically by throwing out the top 4 and bottom 4 rates then averaging out the 8 remaining. When you look at how everything eventually played out, it becomes clear Barclays was not alone in what they were doing.
- cb18 14y agoBarclays was not alone in what they were doing yeah, I think I read on Taibbi's blog that the attention initially came to Barclays because they weren't "juicing the goose," they then were encouraged to do so to alleviate the disparity in the rates they were reporting relative to the other banks. postscript- I reviewed the post before submitting( http://www.rollingstone.com/politics/blogs/taibblog/libor-banking-scandal-deepens-barclays-releases-damning-email-implicates-british-government-20120704 http://www.rollingstone.com/politics/blogs/taibblog/libor-ba... ) The scenario described above is as told by the recently resigned Barclays ceo, perhaps not an exemplar of honesty, but it seems plausible.