Banking Benchmark: Future of LIBOR under review

LONDON: A global probe into whether banks colluded to set the interest rates at which they borrow money from each other has thrown into question the future of the London Interbank Offered Rate (Libor). If Libor is found to have been distorted or manipulated, it would cast doubt on every contract that has used it as a reference point. Doubts about the way the rates are decided arose during the worst of the financial crisis, when Libor remained relatively low despite the fact that the interbank market it is meant to represent had dried up.

Published in The Express Tribune, February 12^th, 2012.