Financial Crisis Manipulated by London Inter-bank - 790 Words

In 2012, financial markets saw the emergence of the largest financial crisis possibly due to the manipulation of the London Inter-bank Offered Rate by financial institutions mainly banks.. The inter-bank offered rate came into existence when financial institutions in London demanded a benchmark for lending rates. This was needed so as to calculate the prices for various financial instruments such as interest, swaps, futures, options, student loans, and mortgages As a result of this demand, a course of action were taken by the British Banker’s Association which in 1986, resulted in the development and publication of the first London Inter Bank Offered Rate. In addition, the inter-bank offered rate is one of the most active interest rates that is solely based on a self reporting system in which the rate submitter of each bank present on the London inter-bank market a rate at which they were charged to borrow capital. As a result of the lack regulatory structures being put in p lace, banks were able to submit rates that benefited them at the expense of others. LIBOR not only give preference to the pound sterling but to that of other worldwide currencies such as US Dollar, Japanese Yen and Canadian Dollar. Nearly every rate used in financial calculations has its basis in the Capital Allocation Pricing Model which states that any interest rate required for any risky venture will necessitate a compensation rate above a â€Å"risk-free rate.† By way of explanation, the riskier anShow MoreRelatedWhat Went Wrong with Libor Rate2312 Words   |  10 PagesGROUP PAPER: WHAT WENT WRONG WITH LIBOR RATES? â€Å"Honesty is a very expensive gift. Do not expect it from cheap people† Warren Buffet Table of Contents Introduction 2 History 2 Origen of the crisis 3 Probable Reasons for the LIBOR manipulation 5 Main players involved in the LIBOR scheme 6 Recommendations on what to do to avoid this problem 6 Reference List 8 Read MoreWhat Went Wrong with Libor Rate2312 Words   |  10 PagesGROUP PAPER: WHAT WENT WRONG WITH LIBOR RATES? â€Å"Honesty is a very expensive gift. Do not expect it from cheap people† Warren Buffet Table of Contents Introduction 2 History 2 Origen of the crisis 3 Probable Reasons for the LIBOR manipulation 5 Main players involved in the LIBOR scheme 6 Recommendations on what to do to avoid this problem 6 Reference List 8 Read MoreThe London Inter Bank Lending Rate1384 Words   |  6 PagesIntroduction LIBOR, the London inter-bank lending rate, is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. The London Interbank Offered Rate (LIBOR) is often called the world s most important number, As well as helping to decide the price of other transactions, it is also used as a measure of trust in the financial system and reflects the confidence banks have in each other s financial health. Libor acts as the rate atRead MoreAnalysis Of Barclays Ceo Bob Diamond1189 Words   |  5 Pages In June 2012, Barclays CEO Bob Diamond went before the Treasury Select Committee in the U.K. House of Commons admitting that his company manipulated the LIBOR (the London Inter-Bank Offered Rate). LIBOR has been used since 1969 as a reference rate in the operations of international financial markets and become the basis for trillions of dollars of financial transactions. This case study gives background and overview on the events that lead to and who were all involved with what happened. 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Specific Preventive Measures 8. Elements of Fraud Auditing 9. Measures of Controlling Fraud in Banks 10. Statement of Internal Audit Standard No. 3 2.10.1 Deterrence of Fraud CHAPTER THREE: Research MethodologyRead MoreCustomer Relationship Management20711 Words   |  83 PagesThe impact of customer relationship management on the financial performance of an organization 1 Chapter 1-Introduction The impact of customer relationship management on the financial performance of an organization 2 1.1 Introduction This chapter provides an overview of the dissertation in brief. Background of the study and rationale of the study are discussed in the first half. Then this chapter goes on to explain six research objectives and two research questions. 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These factors will clearly affect business decision making, e.g. whether to trade on Sundays or 24hour a day. [6 marks] Question 1.1.3 – The business of education a) SpecializationRead MoreManaging and Organizing for Innovation in Service Firms a Literature Review with Annotated Bibliography30787 Words   |  124 Pagessmall service firms Small service firms Experiments and interviews Telecommunication Customer involvement in new service development Experiments Telecommunication Customer involvement in new service development Interviews Financial services Front-line employee involvement in new service development 12 3 An overview of the field of research Research on the service workers’ role in new service development and service innovation has been carried out from different