The SEC And Libor Research Paper - 1228 Words.
This paper describes the LIBOR scandal and argues that it is an example of systemic operational risk, in particular people risk. The paper first describes the LIBOR setting process. The explosive growth over the past twenty-five years in the use of interest rate swaps (IRSs) and the process of resetting rates on IRSs, which ultimately led to the unethical manipulation of the underlying LIBOR.
The LIBOR is published daily at 11:30 am (London time) by Thomson Reuters. It measures the cost of funds to large global banks operating in London financial markets. Each day, the BBA ( British Bankers' Association) asks a group of 18 major global banks the following question: “At what rate could you borrow funds, if you wanted to ask and accept a inter-bank offer in a reasonable market size.
The regulatory maelstrom that has followed the Libor scandal in the United Kingdom has posed a chilling question for Australian regulators and market participants: could the same thing happen here? The manipulation of Libor has underscored what critics and UK parliamentarians described as the inability to rely on the honesty or integrity of the financial sector.
The interest rate benchmark LIBOR is expected to cease after end-2021. Firms must transition to alternative rates before this date. Find out more about ongoing transition initiatives and actions the FCA is taking to facilitate the transition.
This paper describes the LIBOR scandal and argues that it is an example of systemic operational risk, in particular people risk. The paper first describes the LIBOR setting process.
Reforming LIBOR and Other Financial Market Benchmarks. In 2008, reporting on the LIBOR scandal revealed that manipulators had arranged for dishonest judgment-based reports of bank borrowing rates.. The remainder of this paper is organized as follows. We begin with a discus-.
Today LIBOR is considered one of the most important indexes in the world of finance, which is why news of banks fixing their LIBOR rates quickly escalated into a full blown scandal. In attempting to explain the effects that such a discovery has on the global financial markets, the first thing that must be explained is its obvious reputational repercussions on banks all over the world.