What Borrowers Should Know About the Libor Rate Scandal

The rate-rigging scandal could be a plus for borrowers.

Like everyone else, Verizon executive Bryan Matthews read the headlines about the rate-rigging scandal involving Libor, short for the London Interbank Offered Rate. Libor is used to set the rate for some 200,000 adjustable-rate mortgages in the U.S. each year and tens of billions of dollars in private student loans. It also affects the interest paid on money market mutual funds and the prices on complex derivative securities. Barclays Bank paid a $450-million fine, and Barclays and other banks face multiple lawsuits for allegedly submitting false interest rates to manipulate rate-setting.

SEE ALSO: Lower the Rate on All Your Loans

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