Tutor Icon  Request A Tutor
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.

LETS STUDY FOR YOUR EXAM TOGETHER

 
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 memorise quotes – (great for closed book exams!)

Memorising quotes can be a crucial element to your GCSE and A-level exams, so mastering the skill can be essential. Being able to use quotes in your written responses is a sure way to get marks fo...

How to choose quotes to learn for English GCSE

We know that learning quotes for a closed-book exam can be daunting, difficult and boring – especially when you’ve already been studying the text for an entire year. In our article ‘Do I need ...

Do I need to memorise quotes for English GCSE?

With the new GCSE specifications released in 2015, most English Literature GCSE exams have now become closed-book exams.

But what does this mean?

This means that in your exam, you won...

Call Now Button