Libor Warning Signs Were There, but No One Acted

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COMMENT

In June, the UK and US authorities fined Barclays Bank 290m for manipulating money market benchmark rates, such as the London Interbank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor).

Before 2007, traders at Barclays manipulated rates in order to obtain a financial benefit. Subsequently, during the global financial crisis, Barclays manipulated rates due to reputational concerns.

Lord Turner, the head of the Financial Services Authority (FSA), told a parliamentary committee that it hadn't occurred to him before 2009 that Libor could be manipulated. However, anecdotal evidence suggests that Libor submissions may have been …