How did LIBOR scandal affect billions of people?
I'm thinking more in the millions.
a) LIBOR is not the only benchmark
b) plenty of student loans, mortgages, etc are fixed rate or not based on LIBOR
c) most people's pension/retirement money is invested in stocks and bonds. The rates that can really play around with bond prices are driven by the Fed, not LIBOR.
I see the point of the prosecutions but kind of agree with you: where the hell are the investigations to the dudes who almost tanked the entire global economy??? Remember how after Enron the gov't went after Marth Stewart to be able to say "hey look look we're doing out jobs!!!" .....by, uh, jailing a woman for pilfering a few bucks? Really? It's the same crap here.
How about Mozillo's head on a plate, and hold the LIBOR for later. Apparently, it hasn't been a priority for four years, so what's a little while longer? Ohhhhhhhh, ma bad, it's an ELECTION YEAR and this is a slam dunk case.
doh
No, it's in the billions, if not in the trillions. So much of the OTC derivatives market is priced off of LIBOR. Just think of the all of the interest rate swap contracts that are priced off of LIBOR..the number is astronomical.
Ah, good catch. Thought you meant $$$.
LIBOR affects the rate at which most corporate borrowings and project finance actually takes place. So save for a handful of people whom have had no contact with any business or government project of any kind over the last twenty years, I'd say you get to a few billion people concerned pretty quickly.
The issue is hardly the amount of the losses. What is truly concerning is that the global financial system and by extension economy were built on an interest rate benchmark that was manipulated by banks and traders on a near daily basis. I may not agree with much of Fed policy but setting interest rates has been an accepted tool for central banks for a long time. The LIBOR case on the other hand is blatantly criminal.
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