NYSE operator takes over administration of LIBOR key bank lending rate
jeff 7/9/2013 10:44:00 AM
".."This change will play a vital role in restoring the international credibility of LIBOR,” she said in a statement.
LIBOR underpins trillions of dollars of transactions all over the world. It is an average rate that measures how much they expect to pay each other for loans. The rate is also used in calculating borrowing costs of hundreds of trillions of dollars in loans and investments such as bonds, auto loans and derivatives.
But the rate was underpinned on trust — an honor system that relied on the banks to be honest. Revelations of its manipulation last summer both shocked the financial community and forced a reform in how it was administered.
The scandal emerged when authorities realized banks — including Royal Bank of Scotland, Barclays and UBS — were submitting false data to gain market advantages..."
--end quote Read the entire story at the WashingtonPost.com:
"The case was brought by the Serious Fraud Office, which said Hayes set up a network of brokers and traders spanning 10 financial institutions and cajoled or bribed them to help rig Libor rates for profit.
During the trial, jurors were told that Hayes promised to pay a broker up to $100,000 to keep the Libor rate "as low as possible."
It took the jury one week to arrive at the verdicts.
Defence barrister Neil Hawes asked the judge to take into account the prevalence of Libor manipulation at the time..."