LIBOR Scandal To Cost $3 Trillion [ANALYSIS]

Meant to represent the amount big banks charge each other for a loan, LIBOR is the benchmark against which millions of loans and upwards of $800 trillion in value (loans, securities, and notional derivative contracts) is measured. When Barclays PLC (LON:BARC) (NYSE:BCS) $450 million settlement with regulators was made public last week, a couple questions were raised: Why does the LIBOR rate matter and who does it affect? The rate matters because it directly or indirectly affects at least 300 million financial and non-financial businesses worldwide though its benchmark role – financial companies often base their rates as...