JOE KLAMAR/AFP via Getty Images
For decades, banks all used one magic number to help them determine how much to charge to lend out money. That magic number was called LIBOR: the London Interbank Offered Rate. And it underpinned everything: car loans, student loans, adjustable rate mortgages, the entire market for mega loans to giant corporations — trillions of dollars worth.
It was basically set by a bunch of bankers asking each other: "Hey mates, what should the number be today?" So maybe it shouldn't have been a surprise when it turned out that some of those mates were rigging LIBOR.
Regulators declared the rate dead. But what shall rise in its place? The deadline is fast approaching. And this guy Richard Sandor, in Chicago, has decided he has way to fix it. He's going to create his own, homegrown number that he hopes will be an alternative to the world's most important number.
Music: "Margie," "Big Apple Boogaloo," "Django Station" and "Waiting for the Sun."
Find us: Twitter / Facebook / Instagram / TikTok
Subscribe to our show on Apple Podcasts and NPR One.
Want economics stories from the comfort of home? Subscribe to the Newsletter.