To Be Presented

In 2012, a scandal was unveiled regarding LIBOR – there are two apparent reasons that the banks were

artificially determining the rates. First, the banks had an inherent conflict of interest when setting LIBOR. Because LIBOR is an international basis for rates set around the world (including derivatives, mortgages, and interbank loan rates), the banks stood to make or lose millions of dollars from rate adjustments. Secondly, banks collaborated in order to make their institutions appear healthier than they were. By intentionally curbing LIBOR lower, banks could purposefully exaggerate their financial positions; this practice was particularly common during the recent financial crisis. Barclays, previously a large investment bank, was one of the banks in the center of the scandal.

At the onset of the financial crisis in September 2007 with the collapse of Northern Rock. liquidity concerns drew public scrutiny towards Libor. . A lower submission would deflect concerns it had problems borrowing cash from the markets. Barclays manipulated Libor submissions to give a healthier picture of the bank's credit quality and its ability to raise funds.

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