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View Diary: Libor --- OUTRAGE .... Please!!!! (210 comments)

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  •  LIEBOR (9+ / 0-)

    The problem is that they lied about the real rate they had to borrow at. Say Barclays would have had to pay 5%, but for the LIBOR submission they would say 4%. If, as suspected other banks did the same the announced LIBOR rate was a lie, and did not reflect the real cost of money, as it was supposed to.

    And this rate is used as a flow through rate to other products (mortgages, derivatives etc) because it was assumed to reflect real funding costs for banks. Deliberately manipulating this core piece of the market for money caused masses of products to be mispriced (with of course some people gaining and others losing).

    Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

    by taonow on Thu Jul 05, 2012 at 03:23:55 AM PDT

    [ Parent ]

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