... a measure of how much banks must pay to borrow money from one another in the short term, is set through a daily poll of the banks.what a nice deal. banks set their own "measure" which is decided though a poll (of the banks). the circle feeds itself: the banks being polled preempt the future state of things, they report a low number, they assume that if they had to borrow from another bank, their cost of borrowing would be low. but banks are banks! what if one arm of the bank responding to the libor poll manipulates their number based on what another arm of the same bank wants?
The efforts to calculate potential losses are complicated by the fact that Libor is used to determine the cost of thousands of financial products around the globe each day. If Libor was artificially pushed down on a particular day, it would help people involved in some types of contracts and hurt people involved in others.circulation sweating money commodity from every interstice: a little bit here, a little bit there & multiplied exponentially.
(...) more than a dozen banks that are involved in setting Libor each day, including Bank of America, JPMorgan Chase, Deutsche Bank and Barclays. Last month, Barclays admitted to regulators that it tried to manipulate Libor before and during the financial crisis in 2008, and paid $450 million to settle the charges.let's explode banks' vicious redundandy: setting libor is liboring together, which makes fraud institutional. as always, banks do what they do best:
If the banks submitted artificially low Libor rates during the financial crisis in 2008, as Barclays has admitted, it would have led cities and states to receive smaller payments from financial contracts they had entered with their banks, Mr. Shapiro said (...)so, liboring is inside consent for self-profit & crisis is the new normal --and banks run both.