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I watched the BBC Panorama tonight. As I have some acuaintance with the process I fill in some of the many gaps in the BBC's typically poor journalism.
Libor rates c 2007 were set by the Britsh Bankers Association, the BBA. They were set or around 20 currencies, not just Sterling ove a range of tenors from overnight to 2 years. The most important were the one month and 3 month rate. The latter was used for swaps and option pricing world wide
Each currency had an associated panel of banks, around 16 for Stering. Every morning the BBA would phone all the panel members nd ask for their Libor rate ie the rate they would lend at in size to another bank on the panel. In size means circa £100 to £500 million. The BBA discarded the 4 top rates and the 4 bottom rates and calculated the average of the middle 8 rates which was published at 11:00 as the that day's Libor rate. It is therefore difficult to see how one bank could shift the rate significantly there had to be a group of banks involved, a comspircy.
In my work I always distrusted LIBOR rates because they were not traded rates. I always used OIS , overnight interest rate swap rates which only the biggest 6 to 8 banks did but the were trraded rates at which actual swap transactions took place.
I saw no evidence of any rigging of the Libor market just a nagging uncertainty about the way LIBOR was compilied. It was open to manipulation.
All banks keep a giant spreadsheet that aggregates their net postions over all instruments, swaps, FRAs, options etc but they all settled against LIBOR so banks knew the precise effect of a one basis point move in LIBOR on their profits.
Simples!