4/16/2013

LIBOR Rate Rigging


Royal Bank of Scotland Libor Rate Rigging Patent Trade Secret lest BRICS colon scam may bankrupt them - House of Cards to Collapse in Silence?

Article by Mark Scott here:

http://dealbook.nytimes.com/2013/04/11/senior-r-b-s-executive-in-japan-expected-to-resign-after-libor-scandal/



Latest
Yesterday
Week Ago
Federal Funds Rate
0.15%
0.15%
0.16%
Discount Rate
0.75%
0.75%
0.75%
Overnight Libor (1 day delay)
0.16%
0.16%
0.15%
Freddie Mac 30/60
0.00%
3.00%
2.85%
Fannie Mae 30/60
3.04%
3.08%
3.16%
6 Month Libor (1 day delay)
0.44%
0.44%
0.44%
10 Year Treasury Security
1.84%
1.78%
1.86%
The Prime Rate
3.25%
3.25%
3.25%

RATES AS OF 4/15/2013

 

1 Year LIBOR
Month
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Jan
1.477%
1.4607%
3.2710%
4.9412%
5.4414%
4.22375%
2.00375%
0.98438%
0.78094%
1.12805%
0.84350%
Feb
1.368%
1.3645%
3.5114%
5.1526%
5.3328%
2.84938%
1.97500%
0.84625%
0.78125%
1.09570%
0.78100%
Mar
1.340%
1.3401%
3.8420%
5.2476%
5.2009%
2.70875%
2.11938%
0.83938%
0.79025%
1.05980%
0.75150%
Apr
1.362%
1.8082%
3.7101%
5.4217%
5.2967%
2.48625%
1.97188%
0.92000%
0.78250%
1.04850%
0.73150%
May
1.2214%
2.0764%
3.7789%
5.4139%
5.3885%
3.07875%
1.87688%
1.01563%
0.76100%
1.04720%
 
Jun
1.2014%
2.4682%
3.8632%
5.7660%
5.4048%
3.16375%
1.60000%
1.20406%
0.72950%
1.06920%
 
Jul
1.2789%
2.4632%
4.1745%
5.5910%
5.42563%
3.31063%
1.60625%
1.17313%
0.73350%
1.06800%
 
Aug
1.4714%
2.3001%
4.3123%
5.4501%
5.24500%
3.25250%
1.49750%
1.03669%
0.76025%
1.05350%
 
Sep
1.2857%
2.4445%
4.4067%
5.2985%
5.27500%
3.20688%
1.33000%
0.84306%
0.80000%
1.03200%
 
Oct
1.4551%
2.5289%
4.6765%
5.3348%
4.90125%
3.96250%
1.26375%
0.77775%
0.86489%
0.97300%
 
Nov
1.4867%
2.9607%
4.7379%
5.2439%
4.63750%
3.17375%
1.19938%
0.76219%
0.93561%
0.87550%
 
Dec
1.4582%
3.1004%
4.8226%
5.3139%
4.45750%
2.76625%
1.01750%
0.78656%
1.07106%
0.86000%



 


2010
2011
2012
2013

0.98438%
0.78094%
1.12805%
0.84350%

0.84625%
0.78125%
1.09570%
0.78100%

0.83938%
0.79025%
1.05980%
0.75150%

0.92000%
0.78250%
1.04850%
0.73150%

1.01563%
0.76100%
1.04720%
 

1.20406%
0.72950%
1.06920%
 

1.17313%
0.73350%
1.06800%
 

1.03669%
0.76025%
1.05350%
 

0.84306%
0.80000%
1.03200%
 

0.77775%
0.86489%
0.97300%
 

0.76219%
0.93561%
0.87550%
 

0.78656%
1.07106%
0.86000%


The London Inter-Bank Offered Rate, or LIBOR is calculated upon rates that contributor banks in London offer each other for inter-bank deposits.  From a bank's perspective, deposits are simply funds that are loaned to them.  LIBOR is the rate at which another London bank can borrow money from other banks.  Rate calculations are complex as they incorporate variables such as time, maturity and currency rates. There are hundreds of LIBOR rates reported each month in many world currencies. 

Price fixing and boosting the rate falsely for individual and bank gains are serious crimes; but the scandal seems hushed and secretive. The story doesn't receive much attention.
The average American probably does not understand this; but for example: many mortgage rates have been calculated by this falsely inflated index. Most Jumbo Mortgages in California are tied to LIBOR when the 11th District Cost of Funds Index started being phased out because there were few banks who controlled the Cost of Funds in California. Around 2006 the 11th District or COFI index became the index out of favor because Wells Fargo, Bank of America, and WAMU directly influenced the rates on savings deposits and dominated, perhaps cornered the whole savings market in California. Banks went to using the LIBOR that was seen as an honest and less manipulated index, how wrong that thinking was…

Have we been over charged on our LIBOR rates? Yes