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London-based Barclays Bank agreed to pay a $453 million fine over charges it manipulated the London Interbank Offered Rate, a key global interest rate.
It may make your eyes glaze over at the mention, but the LIBOR (London Interbank Overnight Rate) is a key to the economy. The rate is the basis for many loans and transactions, from adjustable rate mortgages to credit cards and small business loans. Barclay’s Bank has admitted manipulating the LIBOR. It was fined $450 million last week by American and European regulators and today Britain announced a criminal investigation.
Robert Smith of NPR’s Planet Money joins the show to explain why the LIBOR is so important.