Banks will no longer be able to lie on their Libor submissions as a new computer system combined with close scrutiny mean rigorous checks will be in place from this summer, keeping the key benchmark accurate.
The Daily Telegraph reports that the benchmark’s owner, ICE Benchmark Administration (IBA), took control of Libor following the manipulation scandal and hopes its changes will restore integrity to the index.
Libor is an interest rate benchmark that measures the cost of lending to banks and is used as a measure of risk in financial markets. As a result, more than $350tril of contracts are based on Libor.
Each day a group of banks publish the average cost at which they can borrow money from other banks. The measure was founded in the 1980s and grew in importance in the following decades.
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