LIBOR: Origins, Economics, Crisis, Scandal, and Reform

20 Pages Posted: 12 Apr 2014

See all articles by David Hou

David Hou

Federal Reserve Banks - Federal Reserve Bank of New York

David R. Skeie

University of Warwick - Warwick Business School

Date Written: March 1, 2014

Abstract

The London Interbank Offered Rate (LIBOR) is a widely used indicator of funding conditions in the interbank market. As of 2013, LIBOR underpins more than $300 trillion of financial contracts, including swaps and futures, in addition to trillions more in variable-rate mortgage and student loans. LIBOR's volatile behavior during the financial crisis provoked questions surrounding its credibility. Ongoing regulatory investigations have uncovered misconduct by a number of financial institutions. Policymakers across the globe now face the task of reforming LIBOR in the aftermath of the scandal and crisis.

Keywords: libor, financial crisis, scandal, interbank, banking, reference rate

JEL Classification: G01,G12,G15,G18

Suggested Citation

Hou, David and Skeie, David R., LIBOR: Origins, Economics, Crisis, Scandal, and Reform (March 1, 2014). FRB of New York Staff Report No. 667, Available at SSRN: https://ssrn.com/abstract=2423387 or http://dx.doi.org/10.2139/ssrn.2423387

David Hou

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

David R. Skeie (Contact Author)

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

HOME PAGE: http://www.wbs.ac.uk/about/person/david-skeie

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