Barclay's and Conning Libor – what really happened | Anorak

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Barclay’s and Conning Libor – what really happened

YOU’LL have seen the stories all over the place about Barclay’s ‘fessin’ up to having tried to manipulate Libor.

Just as background, Libor is the rate at which banks lend to each other. It’s also the rate at which huge numbers of financial contracts are set by. Libor plus 3% wouldn’t be unusual for a commercial loan for example. So, if Libor is wrong then the interest rates on those tens of trillions (maybe hundreds of trillions) of other contracts are also wrong.

And we know that Barclay’s tried to manipulate that Libor price. Sometimes in order to try and make money on those tens (or hunreds) of trillions of contracts and sometimes just to make the bank itself look less risky in the Crash.

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Posted: 28th, June 2012 | In: Money | Comments (2) | Comments RSS feed:RSS 2.0