From the CJR's The Audit:
The Libor lie unravels
A big win for the business pressAnd in today's FT:
Way back in September 2007, the Financial Times’s Gillian Tett started raising questions about the benchmark London Interbank Offered Rate—Libor—a critical benchmark that measures how much banks charge to lend to each other.
Tett noted that:
In particular, the recent turmoil is prompting suggestions that Libor is no longer offering such an accurate benchmark of borrowing costs as before…In April 2008, after Bear Stearns collapsed, but before Lehman Brothers went broke, The Wall Street Journal’s Carrick Mollenkamp reported that the “growing suspicions about Libor’s veracity suggest that banks’ troubles could be worse than they’re willing to admit” and raised questions about whether they were deliberately manipulating the rate....MORE
“The Libor rates are a bit of a fiction. The number on the screen doesn’t always match what we see now,” complains the treasurer of one of the largest City banks.
…some have been refusing to conduct trades at all at the official, “posted” rates, even when these rates have been displayed on Reuters.
Libor affair exposes big conceit at heart of banking