This New Libor 'Scandal' Will Cause A Terrifying Financial Crisis

Now just remember that Derivatives are a Zero Sum game. For every winner there is a Loser. The bigger the wins based on pure gambles, the bigger the losses. Start to tamper with Libor, and you unleash free every scheming Gypsies Dog to Racketeer for fast bucks. Opening it up to cross nations will unleash new scams in a vortex of trouble.

This is now becoming new, uncharted territory.

The bubble game following behind with these scheming Mongrels will sweep many balance sheets into trouble.

The City of London financial center, where the Libor rate is determined each day. Photo credit: Wikipedia

By Jesse Colombo
3 June 2014

Two years ago, a major scandal rocked the world after it was revealed that big international banks had long been manipulating the Libor interest rates to fraudulently boost their profits. As outrageous as the Libor rate-fixing scandal was, it pales in comparison to another Libor “scandal” that is occurring at this very moment, but has received virtually none of the attention that it rightfully deserves. The ultimate fallout of this much larger, little-known Libor “scandal” will be nothing less than an international financial crisis.

The next two sections explain the basics of Libor and the rate-fixing scandal, but can be skipped for those who are already familiar with it.

What Is Libor?

“Libor” is an acronym that stands for “London Interbank Offered Rate,” which is a benchmark interest rate that is derived from the rates that major banks charge each other for loans in the London interbank market. Each day at 11:30 am London time, banks report their estimated borrowing costs to Thomson Reuters, which publishes the average of these estimates in the form of the Libor benchmark interest rate. The Libor is calculated for five different currencies and seven different maturities up to one year.

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