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Was Libor rigged in 2007/2008?
Comments
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Thrugelmir wrote: »There's no obligation to lend at LIBOR. It merely sets a series of benchmarks in the market. .
LIBOR is supposed to be the benchmark of the average rate at which banks have lent to each other on the day.
It now seems that at some times bankers have misreported (artificially inflated) the rates they lent money at on the day, artificially raising LIBOR in the process, and hence manipulating markets that depend on LIBOR.
The impact to consumers is clear, as many mortgages are based on LIBOR. In short, consumers have been ripped off as the cost of lending has been artificially high.
At other times, bankers have misreported the level of LIBOR to the downside, meaning they can borrow at lower rates and increase their profit margins.
In addition to that, a number of financial instruments and derivatives are based on LIBOR, and the opportunity for fraud is clearly massive.
Yet another example of greedy and criminal bankers at work.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Thrugelmir wrote: »LIBOR is calculated in such a way that there would have to significant collusion between banks to force the rate in a given direction.
As LIBOR is calculated by discarding a number of the lowest and highest bids, and averaging the remainder.
Can't help yourself with the bankster apologist routine, can you? LIBOR is often calculated from just 20 or so banks, and it is often a single person within the bank that is responsible for reporting it. The collusion required would be small and easily achieved.
Why not just admit that bankers have been caught with their fingers in the cookie jar, yet again, and should be punished accordingly?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
If libors no longer relate to market interbank levels
LIBOR will always relate to market inter bank lending rates, as it is an average of the rates banks will lend to each other on the day.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Can't help yourself with the bankster apologist routine, can you?
Why not just admit that bankers have been caught with their fingers in the cookie jar, yet again, and should be punished accordingly?
Blimey, you've turned full circle and then decided to turn again for good measure when it comes to your stance on banks Tavish!0 -
Graham_Devon wrote: »Blimey, you've turned full circle and then decided to turn again for good measure when it comes to your stance on banks Tavish!
Not at all.
I completely support bankers being paid well to do their job properly, competing aggressively to lower the cost of consumer lending in an open and free market, as they used to do.
I immensely dislike cartels abusing a near-monopoly position to rip off consumers, as is happening today.
Besides, thrugelmir has been trolling his banker apologist nonsense all over the boards of late, supporting consumers being ripped off. So a bit of turnaround on this issue is fair play.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Just to correct one misconception, LIBOR is what banks report they can borrow at in the interbank market, not what they actually lend at. The two won't be that different, but there is a subtle but important difference of reporting.
The BIS in 2008 first hinted at manipulation around LIBOR by banks not wanting to give the impression they were struggling for funds by lowballing the rates they could borrow at.
This probe centres around manipulation to profit from trades, a few will be caught and punished no doubt, not sure it will make much difference in the end though.0 -
As I was saying - if you know that other banks are deliberately pitching low you know that you can do the same and your quote will actually drive the market rather than being dropped.Just to correct one misconception, LIBOR is what banks report they can borrow at in the interbank market, not what they actually lend at. The two won't be that different, but there is a subtle but important difference of reporting.
The BIS in 2009 first hinted at manipulation around LIBOR by banks not wanting to give the impression they were struggling for funds by lowballing the rates they could borrow at.
This probe centres around manipulation to profit from trades, a few will be caught and punished no doubt, not sure it will make much difference in the end though.I think....0 -
Just to correct one misconception, LIBOR is what banks report they can borrow at in the interbank market, not what they actually lend at.
How would they what other banks would lend to them at? With a crystal ball.
Your understanding is flawed.
"The Libor is the average interest rate that leading banks in London charge when lending to other banks."0 -
As I was saying - if you know that other banks are deliberately pitching low you know that you can do the same and your quote will actually drive the market rather than being dropped.
Yes if you're colluding with the other banks, you'd need quite a few to just a handful depending which currency you are talking about. Yen LIBOR, having fewer contributing banks to the panel compared to Dollar LIBOR or Euribor, would be easier to manipulate.0 -
You should watch the Keiser Report.
What you will discover there will make your hair stand on end.
Manipulation of LIBOR would be no surprise as are the deliberately hyper-low rates of Return for Savers at 3% if that.
Bankers are only in for the money and !!!! the rest of us!#TY[/B] Would be Qaulity MSE Challenge Queen.
Reading whatever books I want to the rescue!:money::beer[/B
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