1. what is libor, who sets the rates? ( 50 words )
2. what was the nature of the scandal? ( 200...

Question

1. what is libor, who sets the rates? ( 50 words )
2. what was the nature of the scandal? ( 200 words )
3. what are the consequences for lending activity worldwide and what entities are affected? ( 150 words )
4. Recommend punishment for the responsible parties ( 100 words )

David · Accepted Answer

LIBOR DEBACLE SCANDEL 
LIBOR 
London interbank offer rate is the short term benchmark rate which is 
used as a barometer in international money market for fixing the rate for lending 
or borrowing to one another.  It is not an interest rate but a benchmark rate that 
reflects cost of short term borrowing in the interbank market. It is not set but 
calculated by Thomson Reuters through LIBOR setting process. Every day at a 
specific London time each bank contributing to the LIBOR setting process 
sends their interbank borrowing rates to Thomson Reuters and based on this 
data it calculates LIBOR.  
Nature of Scandal 
A cartel of international banks tried to fix an extremely sensitive interest 
rate in order to take huge financial profit.

1. what is libor, who sets the rates? ( 50 words ) 2. what was the nature of the scandal? ( 200 words ) 3. what are the consequences for lending activity worldwide and what entities are affected? (...

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