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Business Research Project

2021-07-22 来源: 51Due教员组 类别: Essay范文

51Due教员组给各位留学生分享一篇纯原创代写范文essay,文章主要讨论伦敦银行同业拆借利率(Libor)是指伦敦银行间同业拆借利率,是指导银行间相互拆借无担保资金的重要基准利率。利率决定着无数衍生品、银行和其他利益相关者的命运。在2012年丑闻曝光之前,英国银行家协会(BBA)提出了该利率(McBride,2016),该协会的成员对操纵该利率有着天生的兴趣(Vaughan&Finch,2017)。从2003年开始,多家银行和个人与伦敦银行同业拆借利率操纵有关(McBride,2016)。个人的贪婪、银行的庇护、组织的缓慢行动等诸多因素共同促成了这起历史性的金融丑闻。

希望这篇可以帮助到各位留学生,同时需要代写课业可以直接联系我们51Due客服vx(vx:Athey520)进行咨询。

 

Libor refers to the London Interbank Offered Rate, an important benchmark rate which guides banks to lend unsecured funds to each other. The rate dominates the fate of countless derivatives, banks and other stake holders. Before the scandal was revealed in 2012, the rate was suggested by the British Bankers’ Association (BBA) (McBride, 2016) and the members of the association have some born interest in rigging the rate (Vaughan & Finch, 2017). Started from 2003, multiple banks and individuals have been related with the Libor manipulation (McBride, 2016). Individual’s greedy, banks’ shield, organizations’ slow move, and many other factors contribute to the historic financial scandal together.

 

Among the varied contributions of the scandal, the first to mention was the British Bankers’ Association. As the administrator of Libor, the association fails to report the correct number and to correct the all the chaos as timely. To set the Libor, every morning, each bank of BBA submitted an estimation and the Libor was decided based on the average. To give the number, the banks rely greatly on brokers’ words because brokers knew the flow of money (Vaughan & Finch, 2017). As a result, even if the person who was responsible to give the number wanted to give a precise number on behalf of the bank, he or she might make wrong estimation if the brokers’ information didn’t truly reflect the market’s information. There wasn’t a standardized and transparent method for each bank to submit their number every day. As a result, in the scandal, the British Bankers’ Association unintentionally provided an opportunity for the manipulation. Due to the flaw, different individuals and organizations made great profits.

 

Clearly understanding the loophole of the daily establishment of Libor and being extremely greedy and daring, Tom Hayes, the man who stood in the center of the notorious event, took the great advantage of his network and the loophole. The very first drive for Tom Hayes to rig rate was the bankruptcy of Lehman Brothers (Vaughan & Finch, 2017). Because of great number of trades with Lehman Brothers, Tom Hayes would face severe loss. To escape from the coming disaster, Tom Hayes thought about the Libor rate. By colluding with traders, Tom Hayes not only helped himself get out of the great trouble but also gained great amount of money for himself, his employer and many other people who were involved in the rate manipulation. To make the Libor lower, Tom Hayes even couched an insider at ICAP, the world’s biggest inter-dealer broker how to make the Libor smaller and he also gives brokers huge amount of money for collaboration. After making profits for employers through manipulating Libor at UBS, Tom Hayes then worked for Citigroup and adopted the similar strategy on Tokyo interbank offered rate. However, after enjoying a short triumph, Tom Hayes was disclosed. It was a shock that only one trader was able to manipulate such an important number. In the scandal, like many other traders, Tom Hayes took the advantage of the loophole, bribed brokers who were responsible to report the true market information to the BBA and encouraged organizations and individuals to turn the rate down for personal interest.

 

Besides Tom Hayes, an individual who adopted his own power and resources to change the rate at his will, there were also organizations that were reported to rig. For example, Barclays was reported to rig the rate during 2005 – 2007 to gain profits as many of its traders asked the person who was responsible to submit the rate to revise the rate according to the traders’ positions (McBride, 2016). Clearly, Barclay failed to supervise and regulate its traders’ behavior. The overlook of those law-breaking behaviors were actually covering and even encouraging the improper move. The lack of regulations and punishment suggested that those banks or organizations had to bear managerial oversight responsibilities for the scandal (Doyle, 2012). In addition to Barclays, Citigroup, UBS and many other famous banks were also reported maneuver Libor. It made sense that only the power of only one bank was hard to keep controlling the rate for a such a long time as there should always be other party to figure out some abnormity.

 

After the revealing of the whole issue, many individuals and organizations were reported misconduct and were punished with severe penalty. Meanwhile, the right to setup Libor was also handed over to ICE Benchmark Administration to avoid the supervision loophole (McBride, 2016).  

 

Among all the contributions of the scandal, there are three main parties. First is the BBA itself. Second is the traders. The third is the bankers. The main problem for BBA is that it fails to come up with a way to solve its loophole and keeps the problems to grow bigger. As an association that should find out the Libor which was able to show the real market, it failed to find sufficient and correct information. Meanwhile, they were unable to detect the problem of the number and to correct mistakes in time. For the traders, to satisfy their own needs, the traders sacrifice the correctness of Libor and let the rate confuse the public. Meanwhile, it was also unlawful to bribe and to threaten brokers to give fake market information. Third, banks should take oversight responsibilities as they helped cover the problems for a long time and for an enormous amount. As the employers of the greedy traders, the banks failed to supervise the traders and corrected their behaviors timely. Instead, they allowed all the misconduct last for many years. In the long period, they should had discovered that the Libor failed to align with the true market and to punished the traders who conducted the rigging.


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