‘The Libor scandal’ is a phrase that has lodged in public consciousness in the aftermath of the recent banking crisis without ever being widely understood. Libor is the London interbank offered rate, a benchmark based on the interest rates that leading banks would have to pay were they to borrow in any major currency from another bank. Until 2012 the British Bankers’ Association (BBA) collated the interest rate information supplied by individual banks in order to produce the benchmark figure. Its daily rate-fixings affected the prices of loans, deposits and traded financial instruments all around the world. 

Throughout the second half of the 2000s, banks habitually misreported the interest rates they were being charged to suit their own purposes, either to suggest that their borrowing costs were lower (and their market reputation higher) than they really were, or to generate bigger profits or smaller losses on their