LIBOR for Laymen—What is it and why should you care?

By Gaius Publius on 7/05/2012 09:15:00 AM

UPDATE: For fans of the bottom line, click here.
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Answers to the headline questions first, then explanations.

■ What is it? LIBOR is the London InterBank Offered Rate — it's the rate at which banks loan each other money. (More on why that matters below.)

■ Why should you care? The LIBOR scandal is the biggest financial and political threat since the Masters of the Universe almost took down the world in 2007–2008.