Who Is Hurt And Who Benefited By Libor Manipulation

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1. Who is hurt and who benefits from the manipulation of LIBOR? It is very difficult to say who was hurt and who benefited by LIBOR manipulation. Listener Cameron Napps, in response to our piece on Friday wrote, “They [banks] were lowering LIBOR rates and BENEFITING the 'average Joe '... The only people who have gotten screwed by the deal are the institutional traders ... who were on the other side of rigged trades." The LIBOR manipulation took place during economic upswing (2005-2009) and global recession (2007-2009). Before crisis the rates were manipulated on the both sides, lower and upper. The traders requested to increase as well as to decrease the rate depending on their bets. If the traders managed to get the rates higher before the financial crisis then the consumers suffered. During the financial crisis the rates were going down the consumers would have benefitted as they would have secured a better deal on their loans. It doesn’t mean that the every consumer earned. Pension fund and transportation system had a lot of money invested in LIBOR and they lost their money. For example, the City of Baltimore is suing and has claimed that it has lost millions of dollars in LIBOR. It could never been known that who gained or lost money. Although the banks benefited from scandal but the real victim of LIBOR is the trust in banking system. 2. Who was most responsible for the manipulation of LIBOR? Banks were primarily responsible for the LIBOR

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