71–80 of 184 posts
From the title it seems like Mr. or Dr. Libor died. For a paragraph, it is cute to have Libor personified. Doing it until the end of the story feels a bit artificial to me.
Earlier quoted context omitted.
legally the new definition of 3 month Libor is sofr + 26.161bps
Completely tangentially related: I love basis points. Up until I started working in the FinTech I could not grasp the need for it... but after much repeating "x% plus 3%" and then having to clarify that is 300 basis points and not x*1.03, it got my eyes opened.
Earlier quoted context omitted.
How is it clickbait? LIBOR is omnipresent in finance and it is being killed. Sterling LIBOR is already dead for example.
Well: 1. Its LIBOR, not Libor 2. LIBOR is not a number, its a rate. Thats literally what the "R" stands for 3. LIBOR cant die, as its not a person Its just an awful title because it calls LIBOR a number, which its not, then goes on to treat it as a human, which its also not.
As for "treating it as a human", the financial industry has long used the term "mr market". Ie it's sort of an inside joke.
To the target audience it is not an awful title, nor an awful article.
As for the semantics of numbers v rates - the rate is specified in numbers. And LIBOR v Libor - the number was used so extensively for so long many people didn't even know what the acronym meant. It's like correcting someone for calling a tissue a kleenex.
I was working at an investment bank (as a developer) when this scandal hit. My entire department was laid off as a result. Not because we were involved or complicit in the scandal, but because the scandal indirectly caused a big financial hit to the bank and we were part of the cost cutting measures. It was a traumatic and tragic moment for me at the time. But in hindsight it was the event that lead to my eyes being…
Earlier quoted context omitted.
It is a literary device to make a very boring topic interesting for mainstream readers.
A giant London banking scam touching on something that may even have been involved in the reader's mortgage contract, is not exactly a boring topic.
I personally find finance pretty interesting, but mortgage contracts are pretty much the definition of boring for many people.
Earlier quoted context omitted.
It measures the answer to the hypothetical question "If a another bank with good credit came to you right now to borrow (overnight/1W/1M/3M) in (USD/EUR/GBP/CHF/JPY) what rate would you offer them?" Which is a proxy for the banks' willingless to lend. (It had a less quoted counterpart, LIBID the London Interbank Bid Rate, where would you borrow at.)
ELI5 Why not simply measure the actual trading activity for exactly those activities the previous day?
When I first heard about LIBOR in 2002, I was surprised that the number is just based on a survey of bankers. Surely there would be accuracy issues with that? But at that time I was young and had no finance experience, so though that the adults in the room knew best. Turns out not! I don't think the base problem is that people shaded their numbers one way or another, it's that the system is designed wrong.
I have an adjustable rate mortgage based on LIBOR and the lender still has not said what they plan to do. The presumed replacement rate (SOFR) seems to be pegged near 0% which would be good.
legally the new definition of 3 month Libor is sofr + 26.161bps