America turned 236 years old this week, but in the financial markets that news was nothing compared to the scandal rocking London financial markets.
It came to light this week that Barclays — and potentially other mega banks — helped prop up or inflate the LIBOR rate over the past several years.
Why is LIBOR important?
It stands for London Interbank Offered Rate. It is the rate that major banks can expect to be charged when they borrow money from another bank. If a bank’s cost of borrowing was artificially higher than it should have been they would then have to charge their customers higher interest rates on loans.
In short, we all may have been paying slightly higher interest rates on every type of lending product because a few banks conspired together to artificially keep rates higher than they needed to be.
That’s big financial news.
The LIBOR scandal won’t provide any relief from your current loans and debts, but these articles just might help you:
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Free From Broke was featured in the following carnivals this week:
Self Directed Investing For Retirement Carnival – Justice John Roberts Edition
Carnival of Passive Investing » Financial Success for Young Adults
Tax Carnival #104: Tax Fireworks – Don’t Mess With Taxes
Festival of Frugality #343: The Freedom Edition « BrilliantFinances.com
Carnival of Personal Finance – Independence Celebration 2012 Edition
Thanks for the mention, guys! Happy 236th!