American television news outlets continue to devote sparse time to one of largest banking scandals in history. The controversy over whether major banks have been manipulating the LIBOR, a crucial interest rate that banks use to borrow money from one another, has been gathering steam for more than a month since U.S. and U.K. regulators fined British bank Barclays $450 million for its role in trying to rig the rate.
CNN's Erin Burnett has explained that LIBOR is "an interest rate at the core of our entire economy," adding, "It's really not wrong to say that if you can't trust LIBOR, you can't trust anything in banking." According to The Economist, the LIBOR is used "as a benchmark to set payments on about $800 trillion worth of financial instruments." Baltimore City filed a lawsuit against major banks in the first of what may be a wave of such actions, alleging that the LIBOR manipulation potentially cost it millions of dollars in investment returns.
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