Libor Scandal Is No Match for Its Medieval Precedent

The financial news has recently been dominated by the scandal over the London interbank offered rate (known as Libor), with allegations that leading banks have manipulated a financial benchmark determining the interest rates charged to millions of borrowers and used in derivatives contracts worth hundreds of trillions of dollars.

The U.K. Parliament has become involved, grilling the former chief executive officer of Barclays Plc (BARC)Bob Diamond, over these events. But none of this is entirely without precedent.

A new study of the foreign-exchange market in the Middle Ages, conducted by the University of Reading’s ICMA Centre, has documented a medieval system of exchange-rate manipulation similar to today’s.

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