The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

LIBOR: Origins, Economics, Crisis, Scandal and Reform

  • David Hou
  • David Skeie
Reference work entry


The London Interbank Offered Rate (LIBOR) is a widely used indicator of funding conditions in the interbank market. As of 2013, LIBOR underpins more than $300 trillion of financial contracts, including swaps and futures, in addition to trillions more in variable rate mortgage and student loans. LIBOR’s erratic behaviour during the financial crisis fuelled market instability, simultaneously provoking questions surrounding its credibility. Ongoing regulatory investigations have uncovered misconduct by a number of financial institutions. Policymakers across the globe now face the task of reforming LIBOR in the aftermath of the scandal and crisis.


LIBOR Financial crisis Scandal Interbank Banking Reference rate Interest rate 

JEL Classification

G01 G12 G15 G18 G21 E43 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David Hou
    • 1
  • David Skeie
    • 1
  1. 1.