According to a forthcoming book titled “Rigged” by BBC economics correspondent Andy Verity, banks were purportedly coerced by central banks and governments into manipulating the London Interbank Offered Rate (Libor) in an effort to instill confidence in the financial sector.
Serialized in The Times, the book claims that regulatory bodies and prosecutors were aware of this pressure but concealed it during the prosecution of individuals accused of rigging the rate. Verity’s comprehensive account will be released next week. Libor serves as a benchmark interest rate that signifies borrowing costs between banks. Verity alleges that central banks pressured banks to establish artificially low rates to assuage panic in the financial markets.
Verity argues, “The evidence suggests that in October 2008, central banks such as the Bank of England, the Banque de France, the European Central Bank, Banca d’Italia, Banco de Espana, and the Federal Reserve Bank of New York intervened extensively in the setting of Libor and Euribor.”
The author claims that despite being informed of these actions, regulators withheld the information from lawmakers and the general public. These allegations raise concerns about both the potential scapegoating of individual bankers and the misleading of parliamentary committees regarding the extent of the state’s involvement.