Law360, New York (August 15, 2012, 12:28 PM ET) -- The alleged manipulation of the London Interbank Offered Rate (Libor) has received prominent media coverage this summer, drawing scrutiny of both leading banks and their regulators.
Libor is the average interest rate at which a panel of the world’s largest banks report they could borrow unsecured funds from other banks in the London wholesale money market for maturities ranging from overnight to one year. Libor is calculated for 10 different currencies and is a primary interest-rate benchmark used to price numerous financial instruments, including mortgage loans, floating-rate bonds and interest-rate swaps. The value of derivatives and other financial products tied to Libor is estimated as at least $350 trillion.
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Interest-Rate Ruse: Understanding the LIBOR Scandal
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