London Interbank Offered Rate
Notes on a Scandal
The London Interbank Offered Rate was designed for "wellfunctioning"markets that exist for the vast majority of time, and not for periods of extreme stress where the interbank market disappears or when reporting higher borrowing costs leads to even higher borrowing costs.These are the fundamental problems with Libor that need to be solved. Even if they are solved, Libor has suffered a substantial dent to its credibility.
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