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Brits: Banks lie to keep costs down
Investors and analysts tell the UK's Parliament that banks are artificially reducing the LIBOR benchmark to lower their own funding costs. LIBOR has replaced the U.S. prime rate as a benchmark for business and consumer loan rates.
Britain's Parliament is investigating the unregulated system banks use to calculate the London Interbank Offered Rate (LIBOR) benchmarks, which in recent decades replaced the U.S. "prime" rate as the most common basis for business and consumer loans.
Banks that need capital have an incentive to keep Libor low, compared to what they're actually paying, and that's what they've been doing, says a Barclay's executive and a former Citigroup analyst quoted in
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