The Lowball Tapes Unvovering A Huge Financial Scandal Recorded in 2022

6th September 2024

An interesting series recorded in 2022 about the Libor scandal which related to fraud manipulating the Libor interest rates affecting rate all around the world.

Andy Verity for the BBC has audio recordings, kept secret for years, which reveal evidence that could upend the received version of the biggest scandal since the financial crash.

5 Short episodes on BBC Sounds

The London Interbank Offered Rate (LIBOR) was a benchmark interest rate that was used to determine the cost of short-term loans between major banks. It was a key reference rate for many financial instruments and was widely used in commercial and financial markets.

LIBOR was calculated and published daily by the Intercontinental Exchange (ICE). It was based on the rates that 17 large banks reported for borrowing dollars from each other in the London interbank market. The average of these rates was then used as the LIBOR rate.

LIBOR was phased out in 2023 due to scandals and questions about its validity as a benchmark rate. Some of the criticisms of LIBOR included: Flawed methodology, Manipulation, and Not accurately reflecting actual borrowing.

The Secured Overnight Financing Rate (SOFR) replaced Euro LIBOR in 2023. The Alternative Rates Reference Committee (ARRC) selected SOFR as the rate to represent best practices in US dollar derivatives and financial markets.

You can also read about the Libor scandal on Wikipedia HERE
By 4 July 2012, the breadth of the scandal was evident and became the topic of analysis on news and financial programs that attempted to explain the importance of the scandal.[54] Two days later, it was announced that the UK Serious Fraud Office had also opened a criminal investigation into manipulation of interest rates. The investigation was not limited to Barclays.[55][56] It has been reported since then that regulators in at least ten countries on three different continents are investigating the rigging of the Libor and other interest rates.[57][58] Around 20 major banks have been named in investigations and court cases.

Homeowners in the US filed a class action lawsuit in October 2012 against twelve of the largest banks which alleged that Libor manipulation made mortgage repayments more expensive than they should have been.