Even if you’re tired of reading about Wall Street greed and financial fraud, you may want wake up to read about the latest scandal to hit the global banking industry. Barclays Chairman Marcus Agius, Chief Executive Officer Bob Diamond and several other top executives have resigned following revelations the company manipulated interest rate data. Barclays was hit with a massive £290 million fine and their reputation is under daily assault in the press. A report by analysts at Keefe, Bruyette & Woods claims that banks may end up paying $35 billion in civil damages. “This dwarfs by orders of magnitude any financial scams in the history of markets,” said Andrew Lo, a professor of finance at the Massachusetts Institute of Technology.
Most people outside of the banking industry have never heard of LIBOR until now, yet it affects each and every person paying interest on a line of credit. LIBOR stands for the London Interbank Offered Rate and it serves as a reference point for the cost of lending for the financial products that we all use, such as car loans, adjustable-rate mortgages, student loans and credit cards. [Read more…]
