Sample Solution
The Casey of Anthony Trial
In 2008, the world was captivated by the bizarre behavior displayed by Casey Anthony. The then-22-year-old single mother from Orlando, Florida, was revealed to have spun a web of lies to cover up for the disappearance of her 2-year-old daughter, Caylee, that summer. On October 14, 2008, Casey Anthony was indicted by a grand jury on charges of first degree murder, aggravated child abuse, aggravated manslaughter of a child, and four counts of providing false information to police. She was later arrested, and Judge John Jordan ordered that she be held without bond. Casey did not testify. On July 5, 2011, the jury found Casey not guilty of first-degree murder, aggravated child abuse, and aggravated manslaughter of a child, but guilty of four misdemeanor counts of providing false information to a law enforcement officer.
LIBOR is a benchmark rate, that represents the interest rate at which banks offer to lend funds to other banking institutes in the international interbank market, for short-term unsecured loans (Investopedia, 2018) . This interest-rate is determined by a panel of sixteen major banks (i.e. Barclays, JP Morgan Chase), who provide estimated rates in various currencies and maturities, on their own interbank lending costs. Based on their major involvement in the London Market and their minimal credit risk, a selection process is held annually, to be considered eligible to determine these rates (Investopedia, 2018). Ultimately, the estimates provided from each bank reflects their perception of the financial health of opposing major banking rivals. Banks submit their individual rates daily to the British Bankers Association (BBA), to provide an average of the eight middle quotes, excluding the highest and lowest quartiles. This process obtains the LIBOR rate. LIBOR has sister-equivalent rates such as the EURIBOR, that also serves as a crucial benchmark reference across all financial markets, based on the strength of the Banking Sector.
LIBOR has huge importance worldwide, with its use in an array of financial products: ranging from futures/options to mortgages and student loans. Among them, Market participants have chosen to use the LIBOR for contracts having a notional value of more than $300 trillion and possibly much more (Abrantes-Metz, 2012). Furthermore, these rates aide the decision making of interest rates imposed by Central Banks, as the rates illustrate market behaviour expectations. LIBORs major importance in global finance and the lives of individuals, indicates how vital it is for these LIBOR rates to be accurately correct… However, by 2012, LIBOR took centre stage around the world as the “biggest financial scandal” in world history. Various banking institutes were accused and fined for manipulating the LIBOR. To date, various changes have occurred to the LIBOR after the scandal. Regulators in the United States, the UK, and the European Union have fined banks more than $9 billion for rigging Libor (McBride, 2016), including Big Bracket Banks such as UBS, JP Morgan Chase, RBS and ICAP.
This essay will review the extent of the LIBOR Scandal: how and why banking institutes manipulated these rates to; and to critically evaluate the impact of reforms/reform proposals to prevent similar manipulations.
How and Why did Banks Manipulate LIBOR?
Numerous amounts of Investments worldwide are attached to LIBOR. When the Value of LIBOR depreciates, it indicates that Banks have faith in other rivals. When the Value is High, there is widespread instability between Banks. These fluctuations in the value of LIBOR proved vital in assisting different types of manipulations that had occurred between banks.
There were two types of manipulations in the LIBOR Scandal. On one hand, this insidious corruption occurred in-house, between a variety of traders within the firm. Swaps traders often aske
