LIBOR: An Enthralling Saga!

3 min read

From creating history to becoming history

The Basics of London Interbank Offered Rate

Major Banks around the globe use LIBOR as the average interest rate for their lending activities. Mainly five currencies US dollar, the British Pound, the Euro, Japanese Yen, and the Swiss Franc are the base for LIBOR.

The Interesting History of LIBOR

LIBOR was born by Greek banker Minos Zombanakis, a managing director at J.P. Morgan legacy bank Manufacturers Hanover Ltd. in London on 15th August 1969, when he brokered a syndicated loan of $80 million.

And, the LIBOR Scandal Surfaced

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Criminal Proceeding: Fines and Charges

The scandal led to criminal proceedings on investment banks involved. On 28th February 2012, the US Department of Justice conducted a criminal investigation for the allegation that traders were engaged in direct communication with investment bankers for setting or changing.

What Did It Cost?

It was quite evident after the scam that the manipulation had taken place and cost the US states, counties, and local governments at least $6 billion in fraudulent interest payments, above $4 billion that state and local governments have already had to spend to unwind their positions exposed to rate manipulation.

Devanshee Dave My love for writing developed when I was in school; I used to read a lot and wanted to see my name under published articles, just like the authors I used to read. That fueled the motivation in my early days. I have completed my Master’s degree in Mass Communication & Journalism. I am currently pursuing CFA, which eventually gives my writing a vibrancy and a great mixture of dazzling words and a technical flair. My background includes being a journalist in a local business newspaper to working with start-ups and online media, having finance and economy as my niches.

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