City of London

Understanding Business News: LIBOR

It has been recently revealed that banks including Barclays falsely reported the rate at which they could lend, reported in daily LIBOR reports. Assessing the significance of this is an important part of understanding recent political pressure to reform finance and the City of London; and the future direction of the British economy.

The ‘City’ is a one-square-mile area at the heart of London, where Britain’s major financial institutions are based. Here, businesses ranging from banks, to investment firms, to their supporting apparatus including corporate law firms and accountancy practices, produce over 10% of UK GDP. Since 2007, this engine of the UK economy has come under increasing criticism for what has been perceived as foul play and excess.

Understanding the manipulation of the LIBOR rate by leading banks is an excellent vantage point on the criticism these institutions now face, both in terms of why they have been criticized, and in the broader effects of those criticisms.

LIBOR, or ‘The London Interbank Offered Rate’, is the aggregated mean of the price (or interest rate) at which banks can lend from one another. The cost at which a bank can lend is one of the key indicators of how healthy its competitors believe it to be, and the LIBOR rate is therefore one of the key indicators of the larger economy’s health. For this reason, the LIBOR rate is used in the calculations behind many different financial products.

Traders at Barclays fixed the LIBOR rate to improve their own positions, and later to improve the standing of the bank itself, by asking those responsible for reporting the cost the bank incurred to borrow to muddle the figures.

LIBOR affects trillions of pounds of contracts and loans. Because LIBOR is often built in to loans and contracts, a manipulation of the LIBOR rate could cause it to hit predefined values that ‘trigger’ financial events.

Many lawsuits are already beginning, as companies and individuals involved in the financial markets allege that manipulation of LIBOR affected the investment products they owned or sold in a negative way.

The LIBOR scandal also has more long-term implications for the British financial industry and wider economy. The response to the crisis looks likely to lead to stricter regulation and a more stringent division of investment banking and retail banking operations.

Moreover, the LIBOR scandal has further dented the public’s confidence in banking, and has fuelled demands for the Government to invest in diversifying the British economy away from a model focused too exclusively on the City.

When applying for Universities, or considering current affairs, having an understanding of why public debate on the economy has focused on reform of the financial sector, understanding the LIBOR scandal should provide a valuable perspective.

Additional resources:

Business A-level Revision Tips
Facebook and the Platform Monopoly
Studying Economics

We Are Here To Help

We have hundreds of tutors available right now to help you improve and succeed. From a one hour session online to a full academic
year of face to face lessons, all it takes is five minutes for us to take down your information. We can then find you the most suitable tutors.

Eyup Ozcan
Eyup Ozcan
14:43 24 Feb 20
In the beginning of university terms I was struggling with a few assignments (statistics and research methods specifically). I had contacted many tutoring companies but non of them were able to meet my requirements i.e. some of them were just looking to get their money, some had conditions of how many session you could book and some didn't have the necessary qualifications that were suited for my needs.I had then found Tavistock tutors, they put me through with one of their best statistical tutors they had. I got an email straight away from her and we started working on the assignment and in a few sessions, the assignment was all up to date and I was ready to submit it with great confidence.Tavistock tutors is an amazing company that is worth the investment, they provide you with top class tutors, continuous support outside your lessons as well as being able to match you up with the correct tutor. whenever I need a tutor, all I do is message them on WhatsApp with my requirements and in a day or two, they've found me a perfect tutor.So far I've had great success with tutors in the fields of statistics and research methods as well as medicine related. Really happy with the services I've been given, don't be put of by the membership price, its worth it ;).read more
Muna Ali
Muna Ali
11:48 29 Jan 20
Great service, friendly staff and prompt customer service. Highly qualified selection of tutors and decent price for security and piece of mind.
natalie kanfer
natalie kanfer
15:32 21 Jan 20
By far the best tutoring agency I have ever worked with!
Elena Serena Piccardi
Elena Serena Piccardi
11:26 19 Oct 19
I have been working with Tavistock Tutors for 3 years.I tutor undergraduate and postgraduate students disciplines such as research methods/advanced research methods, SPSS, data analysis, psychology and I also offer support to clients interested in pursuing an academic career (cv and interview preparation).My experience with Tavistock Tutors has been exceptionally good since the very beginning. Each member of the team is striving to provide the best and most personalised service to both students and tutors. This approach helps students achieve their goals and be inspired by tutors, whilst supporting tutors' growth and development of teaching/tutoring skills.Each member of the Tavistock Tutors team is exceptionally passionate about the incredible work they do to help students succeed. Their organisation is fantastic across all the stages of the process: from informing tutors about potential tutoring requests, to communicating any additional personalised requests students might have, to dealing with requests from tutors themselves. Further, their communication is always so friendly and positive: I love interacting with each of them! 😊Overall, I believe this is the finest tutoring agency in London (and probably beyond London!). The tutors are exceptionally talented and a true inspiration for students! As one of the tutors, I cannot be happier I made the decision to join the team a few years ago! They truly made me a better person and supported my personal growth as an individual and as an educator.read more
Melodie Argi
Melodie Argi
08:14 18 Oct 19
Tavistock tutors is by far the best tutor agency is London. The tutor selection is of the highest quality. Handpicked from the British intellectual elite in all sorts of disciplines. The staff is wonderfully helpful as well as being extremely attentive to feedback.read more
Henry Smith
Henry Smith
22:27 17 Oct 19
I have been employed as a tutor with Tavistock Tutors for over 5 years. I tutor mathematics and also help people with job preparation for different career routes (cv, cover letter, interview preparation and online test prep). They are simply a wonderful team of individuals who work collectively and strive to deliver the best possible service to both clients and their tutors. They work doggedly to achieve results. They are particularly honest and their feedback to tutors on how to improve is tailored, concise and always highly constructive. Even after 5 yrs, they only put me forward as a tutor if they think I am the absolute best they can find otherwise they are honest with me and explain why I was not put forward. I think this transparency is a huge reason for their success and keeps the best tutors on their books for years. Their communication on what a client wants is also clinically precise and effective and the team go out of their way to provide potential interests/passions of the client to help the tutor prepare accordingly for the lessons and nurture that interaction. Simply the finest agency and I have tutored with some of the best. World-class tutors and utmost confidentiality with respect to their clientele. I cannot be happier to work for them, a dream job with a team whose capacity for kindness, empathy and boundless intellect never ceases to amaze me. Their work ethic inspires me to relentlessly push myself to be a better tutor with their encouragement and constructive feedback.read more
Albert Tam
Albert Tam
20:50 17 Oct 19
Best tutors in London! Great experience and amazing customer service. Highly recommend, my tutors were all fantastic and a huge help. Really recommend Tavistock Tutors as I never had to worry about not getting the highest quality tutors unlike other agencies and online tutors.read more
I ME
I ME
16:13 17 Oct 19
I’ve used Tavistock multiple times and they never disappoint!I used them for myself secondary school, whilst at university and even now whilst working. Their service is second to none as are their tutors.I highly recommend them to anyone looking to better themselves academically or personally.read more
STAVROS MOUSLOPOULOS
STAVROS MOUSLOPOULOS
13:22 06 Oct 19
Why most reviewers have one contribution, namely to the Tavistock Tutors?High standards ? Mate get a real job rather than living off other's qualifications.Reality Check(See photos attached - that is the owner “looking for me” 1.5 years after leaving London and while my name and photo was on first page of Tavistock Tutor website...)read more
Jonathan Aaron
Jonathan Aaron
16:39 01 Aug 19
Amazing experience, the tutor was reliable, knowledgeable and reasonably priced and the company was both professional and reliable. Definitely will be using them again!read more
David T
David T
16:34 01 Aug 19
I used Tavistock for some Corporate Finance and Financial Modelling training at my firm. They were extremely helpful and the trainer, Simon, was of top quality, experience and charged a fair price. Thank you!read more
Olivia Pluss
Olivia Pluss
11:05 13 Jun 19
I had a fantastic experience with my tutor Elena and Tavistock Tutors. They were very well organized and made the entire experience so seamless and easy for me. I passed my assignment with great marks and the experience was much less stressful than if I had tried to complete the assignment without Elena's help.read more
J Mathews
J Mathews
11:27 22 May 19
My child used Glenda for HL biology. Glenda was outstanding. I would not hesitate to recommend her. Extremely intelligent, always prepared, knows how to teach/very helpful, and also just a nice person. Also, I would use Tavistock again for sure because we had such success with Glenda.read more
Alan Radford
Alan Radford
09:34 09 May 19
Tavistock Tutors were a delight to deal with, and highly professional at all times. They provided my daughter with an excellent tutor at very short notice - after my having approached them on a Thursday urgently requesting a tutor for that weekend. Tavistock Tutors immediately gave the matter their attention; they appreciated the urgency and responded quickly and efficiently, and helped to set my daughter up with exactly the right sort of tutor. Fantastic!read more
Sophie Taieb
Sophie Taieb
12:55 29 Mar 19
Very happy with Tavistock tutors services. They provide a wide range of tutors, from all backgrounds and for all types of needs. My uni son needed some help in research and methodology. We found a perfectly suited tutor in less than 3 days. He is very knowledgeable, punctual, open minded and brings the support needed to my son. I would definitely recommend Tavistock tutorsread more
Next Reviews

How to analyse form in an English essay (13+/GCSE/A-level)

Stuck on analysing form in literature? Tavistock Tutors are here to help…
Whether one is helping a student analyse a play or article, a proper consideration of form is crucial. Yet 'form' is a...

6 Reasons To Hire A Tutor For Your Child

Most children will come across several challenges with learning during their school journey. The desire of most parents is to boost their kids enthusiasm for learning, build educational self-esteem an...

How To Utilize Your Summer Holidays?

Holidays are the best period for many students as they are free from their daily school activities. You’ll never get such blissfully long holidays when you’re working — so make the most of them....

Call Now Button