Bloomberg: Interest-Rate Benchmarks Questioned
Citing a study by Fideres Partners, Bloomberg reported that banks underestimated LIBOR submissions long after probes began into allegations they were doing so, raising questions of whether lenders can be relied on to provide sound data for interest-rate benchmarks.
Bloomberg said, according to the study, in the worst days of the euro-zone crisis in 2012, the 12-month dollar London interbank offered rate was about half what it should have been, showing they were significantly understating how much loans would cost.
Bloomberg quotes a Fideres founding partner as saying, “LIBOR suppression was not confined to the great financial crisis but carried on until at least 2012.”
To read the entire Bloomberg report, click here.