It was easy to miss, with the impending end of civilization burning up the headlines, but a beyond-belief financial story recently crept into public view.
A Bloomberg headline on the story was a notable achievement in the history of understatement. It read:
LIBOR’S UNCERTAIN FUTURE TRIGGERS $350 TRILLION SUCCESSION HEADACHE
The casual news reader will see the term “LIBOR” and assume this is just a postgame wrapup to the LIBOR scandal of a few years back, in which may of the world’s biggest banks were caught manipulating interest rates.
It isn’t. This is a new story, featuring twin bombshells from a leading British regulator – one about our past, the other our future. To wit:
- Going back twenty years or more, the framework for hundreds of trillions of dollars worth of financial transactions has been fictional.
- We are zooming toward a legal and economic clusterfuck of galactic proportions – the “uncertain future” Bloomberg humorously referenced.
LIBOR stands for the London Interbank Offered Rate. It measures the rate at which banks lend to each other. If you have any kind of consumer loan, it’s a fair bet that it’s based on LIBOR.
This article originally appeared on www.rollingstone.com: Taibbi: Is LIBOR, Benchmark for Trillions of Dollars in Transactions, a Lie?