Infographic: LIBOR lies spawn LIBOR lessons

libor

Apparently, LIBOR lying was not a secret on Wall Street.

A CNN Money report this week, “Libor tinkering was no secret on Wall Street” reveals financial analysts reported the scandal four years ago.

The LIBOR (London Interbank Offered Rate) is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks.

LIBOR rates are calculated for ten different currencies and 15 borrowing periods ranging from overnight to one year and are published daily after 11 am (London time) by Thomson Reuters.

Many financial institutions, mortgage lenders and credit card agencies set their own rates relative to it. At least $350 trillion in derivatives and other financial products are tied to the LIBOR.

According to CNN, what even whistle-blowing analysts missed was that the LIBOR rate wasn’t just tampered with to hide banks’ weak balance sheets, but at Barclays, staffers had been submitting Libor rates designed to leverage Barclay traders’ trading positions, according to a $450 million settlement Barclays made with U.S. and British regulators.

We were like, huh?

You need an accounting degree to understand the LIBOR lies, so we went to, well AccountingDegree.net to get a handle on the significance of the scandal.

Mouse over and click the infographic below to understand the far-reaching implications of the LIBOR lies.

See more infographics.

 

About the author

A DeadlineNews.Com Silicon Valley Contributing Writer, with a penchant for the quick, story-telling capability of infographics, Mark K. Hicks is broker/owner of The Seabrooke Group in San Jose, CA. Hicks, who takes a "client for life" approach to business, has more than 20 years real estate experience, including creative financing, foreclosure acquisition, probate sales and tax-deferred exchanges. Network with Hicks on LinkedIn.

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