How to fix the LIBOR rate
Apparently all it takes is a coffee.
The LIBOR rate, or London Interbank Overnight Rate, is an index of the estimated interest rate commercial banks have to pay to borrow money short-term. It is based on estimates submitted by banks, rather than an actual market rate. It was recently revealed, mostly by Barclays, that over the past half decade the index estimates have been manipulated to benefit the banks that submit them. This has implications for consumers broadly, as many interest rates are indexed to the LIBOR, and similar indexes for other regions like the EURIBOR; for example, interest rates on adjustable rate mortgages are often defined as a base rate plus the LIBOR rate.
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I have worked in economic policy and research in Washington, D.C. and Ghana. My husband and I recently moved to Guyana, where I am working for the Ministry of Finance. I like riding motorcycle, outdoor sports, foreign currencies, capybaras, and having opinions.