How many of the banks are United States banks and how many of the banks are foreign banks?
3 of the banks are United States banks. 13 of the banks are foreign. · What is the relationship of the funding cost of the foreign banks in London to most banks in the United States? Not a lot other than foreign banks and banks in the United States both pay interest. Any other similarity of funding cost seems to be coincidental. · What oversight do United States regulators have over the setting of LIBOR? Not a lot. · How do we know that the rate set by the British Bankers’ Association is actually the “market rate” for borrowings in United States dollars for the banks that are surveyed? We don’t and as it turns out the banks were providing false information to the BBA earlier in the year. · Why did the banks mislead the BBA by understating LIBOR? Such a misstatement seems counterintuitive to most observers. It has been speculated that the banks didn’t want the marketplace to know how expensive borrowings had gotten for themselves. They also didn’t want their shareholders to know that th
