Investors duped once again by tricky traders in Libor scandal

The scandal surrounding the London InterBank Offered Rate, or Libor, seems like yet another barely comprehensible tale of Wall Street‘s opaque inner workings. At its heart, though, the Libor con was both simple and distressingly familiar: Insiders took advantage of weak oversight to game the system, and regulators did nothing.

Libor was created in 1986 by a trade group — the British Bankers’ Association (BBA) — to measure how much banks in London paid in interest to borrow the money they lent and invested. Each business day more than a dozen banks submit estimates to the BBA on how much it would cost them to borrow money in various currencies and for different time periods.Libor was created in 1986 by a trade group — the British Bankers’ Association (BBA) — to measure how much banks in London paid in interest to borrow the money they lent and invested. Each business day more than a dozen banks submit estimates to the BBA on how much it would cost them to borrow money in various currencies and for different time periods.

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