What the Libor scandal means for you

By Deputy editor Tim Bennett Jul 13, 2012

Tim Bennett

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Tim Bennett explains why the Libor fixing scandal has rocked the City, and what it means for you.

Related videos

• Libor - Britan's most important interest rate

• Watch all of Tim's video tutorials here

Comments (10)

Published in Video tutorials | More articles by Tim Bennett

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  • 1. Desert Dave

    (14 July 2012, 02:46PM)  Complain about this comment

    Brilliant.

    No jargon. No nonsense. Just the whole story in good old English in not too many words.

    Keep up the good work Tim.

  • 2. riskmanager

    (14 July 2012, 03:54PM)  Complain about this comment

    Excellent, clear explanation - thank you, Tim.

  • 3. Roger Alford

    (14 July 2012, 04:17PM)  Complain about this comment

    Banks' LIBOR submissions should obviously not be skewed, but did these skewed submissions actually affect LIBOR? With the 4 top and 4 bottom submssions discarded it would not be easy. Could a dealer skewing his submission improve his bottom line? surely this would be calculated from his bank's actual cost of funds, not his bank's submitted rate. Using actual rates would lead LIBOR to disappear when in a crisis there are no deals.

  • 4. Roger Alford

    (14 July 2012, 04:21PM)  Complain about this comment

    But did skewed submissions ACTUALLY alter LIBOR? Using actual rates would make LIBOR disappear when deals dry up in a crisis.

  • 5. Denise

    (11 August 2012, 12:41PM)  Complain about this comment

    Tim, thanks for your straightforward explanations. More use of your whiteboard with concrete examples might help those non auditory learners. You have done this in other videos on explaining LIBOR spread which helped.
    Great work though. Subscribed to your YouTube Channel

  • 6. Gaurav Singh

    (15 August 2012, 07:46AM)  Complain about this comment

    Tim - You said that by fabricating the LIBOR rate, banks will succumb to avalanche of losses, but then, how can banks pay bonuses to their employees by posting losses.

  • 7. tim Bennett

    (17 August 2012, 04:21PM)  Complain about this comment

    Gaurav - avalanche of "lawsuits" (which could entail losses). Bonus pool calculations can be ring fenced to ensure employees get paid come what may. Just look at how the telecoms sector used EBITDA to get around the fact they were not making much money at a PBT level!

  • 8. Hassiba

    (22 August 2012, 11:38AM)  Complain about this comment

    Great video Tim. Keep them coming!

  • 9. Gaurav Singh

    (24 August 2012, 04:23PM)  Complain about this comment

    Breaking News Tim - Royal Bank of Scotland's involvement in the Libor rigging scandal could be worse than Barclays.

  • 10. mathew

    (05 September 2012, 09:09AM)  Complain about this comment

    Tim is an excellent teacher - extremely sound on the fundamentals. am a big fan.

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