LIBOR Flaws Allowed Banks to Rig Rates Without Conspiracy
Bloomberg reported today (7/16/12), according to traders, flaws in the way LIBOR is set allowed individual banks to manipulate the key global interest rate for profit for years.
Bloomberg said while employees allegedly tried to rig the benchmark for $500 trillion of securities worldwide, they didn’t need to conspire with counterparts at other firms to affect where the rate was set each day, as some regulators concluded, said the people, one of whom lost his job for trying to distort the rate.
Bloomberg quoted a lecturer at Yale Law School as saying in a paper to be published in the Winter 2013 issue of the Yale Journal on regulation, “It is far easier to manipulate LIBOR than it may appear. No conspiracy is required.”
To read the full Bloomberg story click here.