Back in 2008 my very first blog entry was about LIBOR and whether or not it was a real or imaginary interest rate. Since that time I wrote another six articles on the topic and got singled out by the British Banker’s Association, the publishers of LIBOR, for special treatment and criticism. Starting about two weeks ago it […] [read full story]
It’s a brave new world for Federal Funds. The actual rate that Federal Funds were trading at last week was 0.23% despite the Target Federal Funds Rate being 1.00%. This anomaly could be signaling the end of the era when Federal Reserve policy is expressed in a single number, the Target Federal Funds Rate. Technical […] [read full story]
This week I received a “client alert” from the law firm of Milbank, Tweed, Hadley & McCloy about LIBOR. Richard Gray is a Milbank Partner and is the author of the client alert. He discusses LIBOR and the issues posed by the disparity between the publicly quoted LIBOR rate and the actual rates on Eurodollar […] [read full story]
OK. I confess. I can’t take it anymore. I vowed to stop picking on LIBOR and the British Banking Association. But like a smoker that can’t kick the habit I can’t take it anymore; I have to write about LIBOR. LIBOR has been in the news for the last few weeks and is being touted […] [read full story]
Brian Mairs of the British Bankers’ Association (the “BBA”) appears to have responded to my recent blog article about LIBOR by posting a comment. I cannot confirm that the posted comment was written by Mr. Mairs, but based upon blog tracking software I believe that the comment was posted by someone at the BBA and […] [read full story]
I am a critic of LIBOR’s use as a US benchmark interest rate. With more than $350 trillion of outstanding LIBOR indexed debt, a small error in LIBOR has a massive distorting effect on collective borrower interest expense. US borrowers are being overcharged because LIBOR overstates what it is intended to measure. LIBOR has two […] [read full story]
The arrogance of the British Bankers Association (the “BBA”) and the lack of interest on the part of the United States Government in connection with the issues surrounding LIBOR continue to amaze me. LIBOR (the “London Interbank Offer Rate”) is supposed to be “the actual rate at which banks borrow money from each other”. And, LIBOR […] [read full story]
In the face of international scrutiny and criticism, the British Bankers Association (the “BBA”) announced Friday that it has decided to do essentially nothing to clean up its act so that US$ LIBOR actually reflects market rates of interest. According to Reuters approximately $150 trillion of debt has its interest rate indexed to LIBOR and […] [read full story]
Today the Wall Street Journal reported on an early look at the expected British Bankers’ Association (the “BBA”) LIBOR reforms http://online.wsj.com/article_print/SB121140613207512091.html. The issue that the BBA is trying to address is how to prevent suspected manipulation and collusion on the part of the banks that report LIBOR to the BBA. The BBA decided to act after […] [read full story]
Today the Wall Street Journal reported that Fed officials have been in contact with the British Bankers Association regarding potential manipulation of the LIBOR rate. While the Fed is once again pursuing a “better late than never” strategy of protecting the integrity of the banking system, the rest of Washington seems to have gone AWOL […] [read full story]
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