Libor Furor: Key Rate Gets New Scrutiny
An analysis by The Wall Street Journal shows that banks’ submissions used to calculate the London interbank offered rate often are slow to change and sometimes fail to track the market’s view of the credit risk posed by each firm. We found that banks’ submissions used to determine the London interbank offered rate (Libor) frequently remain static and often don’t align with the market’s perception of each firm’s credit risk, leading to questions about Libor’s credibility....