A scandal that found banks rigged Libor rates to increase their trading profits brought the internationally used little known but widely used interest rate measure to the limelight. The London Interbank Offered Rate (Libor) is the average interest rate estimated by London banks to charge to each other for borrowing. Rates are published daily and cover overnight to maturities of one year rates and more than in ten currencies. More than $350 trillion in derivatives and other financial products including pricing loan rates for 1, 3, 6, and 12 months rates in the U.S. are based on Libor. Libor rates are also used in the U.S. and around the world for pricing many types of consumer and corporate loans, debit instruments and debt securities.
In June 2012, a settlement by Barclays Bank revealed that member banks were involved in a significant fraud and collusion in setting rates. The U.K. regulators took over the responsibility in September 2012. In July 2013, the U.K. regulators allowed the NYSE Euronext to take over the setting of the Libor interest rate. According to published reports on the Web, the NYSE Euronext is now trying to put the rate fixing behind and built confidence all around the world.