If you’ve ever had a student loan, car loan or mortgage, chances are the interest rate you paid had the London Interbank Offered Rate (Libor) as its basis. But Libor is more a guesstimate than anything else, and traders have found ways to manipulate the number to their advantage. According to financial journalist Matt Phillips, banks and other financial institutions have been slow to replace Libor with something else, despite regulators’ calls to do so by 2021. Ultimately, the change will prove costly. getAbstract recommends this illuminating article to borrowers and lenders.
About the Author
Matt Phillips is a financial reporter for The New York Times.