LIBOR fixing

holly_hobby

Thats right K., the rate is/was quartely set.

H

Thrugelmir

holly_hobby wrote: »

LIBOR actually relates to the cost of borrowing between banks, and was in the recently exposed scandal, being artifically manipulated downwards (than it would otherwise have been had the exercises conducted by the banks involved not taken place) -

Upwards as well.

By influencing upwards. Traders with funds to lend to other banks earnt more income. On a few hundred million pounds a sliver of a % point made thousands of pounds.

holly_hobby

Yep, but given that manipulation downwards was created to give the impression of creditworthiness and stability of the banks involved, this as far as I am aware was the predominant direction it took.

Although I also don't dispute that there was also evidence of upwards manipulation from the previous (probably artifically low) rate used to generate fast money.

LIBOR rates are traded daily, but in respect of LIBOR MORTGAGES, the rate is set quarterly, so would not have been as exposed to as much fluctuation as the general LIBOR rate.

I must also stress that Im not a Inter Bank Offered expert, but whilst I know LIBOR mortgages (from as far back as their introduction), I know just a little about the IBO market and what is a very complex subject,

Hope this helps

Holly

Thrugelmir

holly_hobby wrote: »

Yep, but given that manipulation downwards was created to give the impression of creditworthiness and stability of the banks involved, this as far as I am aware was the predominant direction it took.

Was the case after the collapse of Northern Rock in August 2007 when wholesale money markets froze.

When Barclays was fined last year. The FSA had documentary evidence of 259 requests made by derivatives traders from 2005 onwards to fix LIBOR and Euribor rates.

antrobus

Thrugelmir wrote: »

and German banks.

All sorts of banks. Depends on which ones are on the panels; LIBOR is set for 10 currencies after all.

However as far as I'm aware "US banks based in the US" would not have a role in the calculation of LIBOR. They would however use LIBOR for pricing. Since the US doesn't really have a national banking system, they don't have an interbank market to set market prices, so they use BBA LIBOR. Hence the reason why the Americans are upset that the numbers have been 'fudged'.

Thrugelmir

antrobus wrote: »

All sorts of banks. Depends on which ones are on the panels; LIBOR is set for 10 currencies after all.

Agreed. This is £.

Abbey National plc
Bank of Tokyo-Mitsubishi UFJ Ltd
Barclays Bank plc
BNP Paribas
Citibank NA
Credit Agricole CIB
Deutsche Bank AG
HSBC
JP Morgan Chase
Lloyds Banking Group
Mizuho Corporate Bank
Rabobank
Royal Bank of Canada
The Royal Bank of Scotland Group
Soci!t! G!n!rale
UBS AG

This is $

Bank of America
Bank of Tokyo-Mitsubishi UFJ Ltd
Barclays Bank plc
BNP Paribas
Citibank NA
Credit Agricole CIB
Credit Suisse
Deutsche Bank AG
HSBC
JP Morgan Chase
Lloyds Banking Group
Rabobank
Royal Bank of Canada
Soci!t! G!n!rale
Sumitomo Mitsui Banking Corporation
The Norinchukin Bank
The Royal Bank of Scotland Group
UBS AG