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Open Secret
In the midst of the financial crisis of 2008, rumors swirled that a sinister scandal was brewing deep in the heart of London. Some suspected that behind closed doors, a group of chummy young bankers had been cheating the system through interest rate machinations. But with most eyes focused on the crisis rippling through Wall Street and the rest of the world, the story remained an “open secret” among competitors.
Soon enough, the scandal became public and dozens of bankers and their bosses were caught red-handed. Several major banks and hedge funds were manipulating and misreporting their daily submission of the London Interbank Offered Rate, better known as the LIBOR. As the main interest rate that pulses through the banking community, the LIBOR was supposed to represent the average rate banks charge each other for loans, effectively setting short-term interest rates around the world for trillions of dollars in financial contracts.
But the LIBOR wasn’t an average; it was a combination of guesswork and outright lies told by scheming bankers who didn’t want to signal to the rest of the market that they were in trouble. The manipulation of the “world’s most important number” was even greater than many realized. The bankers kept things looking good for themselves and their pals while the financial crisis raged on.
Now Erin Arvedlund, the bestselling author of Too Good to Be True, reveals how this global network created and perpetuated a multiyear scam against the financial system. She uncovers how the corrupt practice of altering the key interest rate occurred through an unregulated and informal honor system, in which young masters of the universe played fast and loose, while their more seasoned bosses looked the other way (and would later escape much of the blame). It was a classic private understanding among a small group of competitors—you scratch my back today, I’ll scratch yours tomorrow.
Arvedlund takes us behind the scenes of elite firms like Barclays Capital, UBS, Rabobank, and Citigroup, and shows how they hurt ordinary investors—from students taking out loans to homeowners paying mortgages to cities like Philadelphia and Oakland. The cost to the victims: as much as $1 trillion. She also examines the laxity of prominent regulators and central bankers, and exposes the role of key figures such as:
- Tom Hayes: A senior trader for the Swiss financial giant UBS who worked with traders across eight other banks to influence the yen LIBOR.
- Bob Diamond: The shrewd multimillionaire American CEO of Barclays Capital, the British bank whose traders have been implicated in the manipulation of the LIBOR.
- Mervyn King: The governor of the Bank of England, who ignored U.S. Treasury secretary Tim Geithner’s repeated recommendations to establish stricter regulations over the interest rate.
Arvedlund pulls back the curtain on one of the great financial scandals of our time, uncovering how millions of ordinary investors around the globe were swindled by the corruption and greed of a few men.
- In Stock Out of Stock
- Portfolio
- 9781591846680
- September 25, 2014
- Stock Photo
- 304
- L 23.6cm x W 16.5cm x H 2.8cm
Book Condition Notes
New: A brand-new, unused, unread copy in perfect condition.
Like New: A copy that looks unread and in perfect condition. Dust jacket is intact, with no nicks or tears. The spine has no signs of creasing. Pages are clean and are do not have any notes or folds of any kind. May have a remainder mark. (usually black or red in colour and is usually a dot or line on the bottom of the book on the page edges).
Very Good: A copy that has been read but is in great condition. May have slight cosmetic defects such as marks, wears, cuts, bends and crushes on the cover, pages, spine and dust jacket if applicable. Pages and dust cover (if applicable) are intact and do not have any notes or highlighting. The spine remains undamaged. May have a remainder mark (usually black or red in colour and is usually a dot or line on the bottom of the book on the page edges).
Good: A copy that has been read but in clean condition. The spine, cover, pages and dust jacket (if applicable) may show signs of wear such as marks, wears, cuts, bends and crushes. Pages and dust cover (if applicable) are intact and do not have any notes or highlighting. May have a remainder mark (usually black or red in colour and is usually a dot or line on the bottom of the book on the page edges).
Acceptable: All pages are intact; the cover is intact. The spine, cover, pages and dust jacket (if applicable) may show signs of considerable wear such as marks, wears, cuts, bends and crushes. Pages can include limited notes in pen or in highlighter, but the notes do not obscure the text. May have a remainder mark (usually black or red in colour and is usually a dot or line on the bottom of the book on the page edges).