By Roland Jones
It may seem like just another obscure banking scandal at a 322-year-old British bank, but there are a number of good reasons why you should care about the LIBOR rate-rigging scandal now roiling the world’s biggest and most powerful banks, including that it probably cost you money if you own a mortgage.
In late June, Barclays paid $453 million to regulators in the U.K and the U.S. to settle accusations that it had tried to influence LIBOR, or the London interbank offered rate — a benchmark interest rate that affects the price at which consumers and companies across the world borrow funds.
The rate, which is fixed via a poll of banks by the British Bankers’ Association, an industry group in London, is the benchmark for setting payments on some $360 trillion worth of financial instruments, ranging from credit cards to more complex derivatives, such as futures contracts.
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