LIBOR: origins, economics, crisis, scandal, and reform

David Hou and David Skeie

No 667, Staff Reports from Federal Reserve Bank of New York

Abstract: The London Interbank Offered Rate (LIBOR) is a widely used indicator of funding conditions in the interbank market. As of 2013, LIBOR underpins more than $300 trillion of financial contracts, including swaps and futures, in addition to trillions more in variable-rate mortgage and student loans. LIBOR's volatile behavior during the financial crisis provoked questions surrounding its credibility. Ongoing regulatory investigations have uncovered misconduct by a number of financial institutions. Policymakers across the globe now face the task of reforming LIBOR in the aftermath of the scandal and crisis.

Keywords: LIBOR; financial crisis; scandals; interbank; banking; reference rates; interest rates (search for similar items in EconPapers)
JEL-codes: G01 G12 G15 G18 (search for similar items in EconPapers)
Date: 2014-03-01
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (17)

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Chapter: LIBOR: origins, economics, crisis, scandal and reform (2013,4th quarter update)
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