Banks have been hit with fines, professionals have been banned from the financial sector, and now trader Tom Hayes has been sentenced to 14 years in prison. All this for the manipulation of the Libor benchmark rate. But what is Libor, and why does it matter how it is set? What is it? Libor stands for the London Inter-Bank Offered Rate and is the average cost of borrowing for banks, calculated daily. That average is taken as official Libor, which is used to price trillions of pounds of loans and financial products across the world. The rate is worked out by asking banks to submit their borrowing costs, discarding the ... (full story)