Anyone interested in money is interested in interest. And they will have an interest in this change. An important interest rate is changing. It is the LIBOR rate. LIBOR is the London Interbank Offered Rate or overnight interest rate ‘estimated’ by leading London banks. It has changed control.
LIBOR affects our lives in many ways
This key benchmark borrowing rate forms the cost base for many loan transactions around the world. It turns out the boys over at the British Bankers Association, formerly responsible for setting the rate, fixed it to their advantage! Yes they were too interested in interest that lined their pockets! That shocker happened during the 2008 financial crisis that affected every person on earth.
The scheme only came to light when it was uncovered early in 2013. British authorities, knowing the universal interest in interest, took action. We can be thankful they took immediate and strong action. There were billions in fines, multiple arrests and most critically for our interest in interest, someone new was put in charge. Turns out it was an American company, NYSE Euronet!
The British are global financial players with a global outlook. First, they gave Canadian Mark Carney control of the Bank of England and responded to the LIBOR crisis by putting the Americans in control! Although it remains under the ultimate control of the British regulators it is interesting they looked well outside to find new direction.
The LIBOR rate is important to anyone with a mortgage. It is the globally accepted key benchmark interest rate for borrowing between banks. That very directly effects the bond market and that effects the cost of your mortgage.
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Movers & Shakers Of Stock Markets,
Lesson links:
Influencers that move markets Lesson 1
Understanding banks and credit Lesson 2
People, places and parts make markets Lesson 3
Invention builds banking power Lesson 4
Mortal investors see immortal debt Lesson 5
Markets spark interest in interest Lesson 6
Financial crisis lessons learned Lesson 7
Bernanke knows booming and busting Lesson 8
Cryptocurrency considerations Lesson 9
Internet money in a digital future Lesson 10
Analyzing analysts, data and investments Lesson 11
Next lesson 8:
Bernanke knows booming and busting
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