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Questo articolo è stato pubblicato il 28 settembre 2012 alle ore 08:32.

My24

Ensuring that the UK financial services sector conducts its business in line with the highest standards of integrity is vital work.
Consumers and market participants must be sure that the regulators stand ready to deal quickly and effectively with issues as they arise – our work on LIBOR over the last seven weeks is testament to this new approach.

There are three things I want to cover today:
•Why LIBOR is so important
•What went wrong
•What is needed to restore confidence in LIBOR

1. So first, why is LIBOR so important?
Since the scandal came to light, we have all become aware of LIBOR, once an obscure benchmark, and its importance as an integral part of the modern financial system.
What struck me when the manipulation was made public was how much it angered people – they were rightly upset that something so important was so badly run, had such poor governance, and was manipulated without regard to the consequences. It said something about the culture of financial services, but also led people to question what they can rely on.
As I have mentioned, LIBOR is used as a reference price for well over $300 trillion worth of loans and transactions around the world. These range from interest rate swaps – to direct lending and the pricing of mortgages to ordinary people, as well as commercial loans to businesses.
The Economist calls LIBOR the most important figure in finance, and they are not wrong. In simple terms – it represents the cost of borrowing to banks. How much a bank has to pay to borrow money is a key determinant of the interest it will charge to lend money. It is therefore vital that people can trust it. And that is why it is critical that it works well and my recommended reforms are deep, wide and effective to ensure that the trust and integrity of LIBOR is fully restored, and quickly.

2. So that's why it matters – now what went wrong?
I would like to step back for a moment and briefly explain exactly what went wrong with LIBOR – I will then link each of my recommendations back to these failings.
There were fundamental flaws in the current system. These were the deep failures in the way LIBOR submissions are made, how LIBOR was governed, and the way it was policed.

Submissions
The key flaw was the inability in the system to manage conflicts of interest. The rate is meant to represent the true cost of borrowing to a bank. Two problems occurred. First, any complex bank has a myriad of different deals, particularly in the swaps market – which became more or less profitable depending on the rate of LIBOR. Traders whose bonuses depended on these deals – had an interest in pushing LIBOR up or down, depending on the deal. They were allowed to do this freely with no oversight.

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