Content

Introduction about LIBOR & its calculation

How its link with Global Financial Market

The Rigging Scandal

Fines and Penalties

LIBOR

London Interbank Offer Rate.

Definition

Calculation

Total value affected by Libor

How its link with Global

Financial Market

It underpins several Financial Instruments,

Derivatives worth of $350 trillion , 10 Currency , 15

Maturities, Securities, Loans.

More then 50 % of the adjustable-rate prime

mortgages and 80% of the adjustable-rate sub

prime mortgages.

More then 50% of the student loans

Some Financial Instrument Derivative

Interest rate swap

Inflation swap

Floating rate notes

Syndicated loans

Forward rate agreement

LIBOR RIGGING SCANDAL

Its was believed that the Libor manipulation was

been common since at least 1991 as per the

Financial Times.

The scandal arose during the 2007-2008 crisis.

Banks tied to Libor Sandal

Barclays Bank

UBS

Bank of America

JP Morgan Chase

Citibank

Deutsche Bank AG

HSBC

Interest Rate Swap

Citigroup had a Interest Rate Swap of notional value

of $14.2 trillion.

Bank of America had a Interest Rate Swap of

notional value of $49.7 trillion.

JP Morgan Chase had a Interest Rate Swap of

notional value of $49.3 trillion

Fines for Manipulation

Regulators in the U.S., UK, and EU fined banks more

than $6 billion for participating in rigging interest rates.

Deutsche Bank, JP Morgan was the fine of $2.3 billion by European regulators.

Barclays agreed pay a $453 million fine to settle allegations.