LIBOR pains : Planet Money For decades, banks used one rate to help set all other rates: LIBOR. After it came out that it'd been rigged, regulators said: no more. Now it's a race — and a road trip — to find an alternative. | Subscribe to our weekly newsletter here.

LIBOR pains

LIBOR pains

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(Photo by JOE KLAMAR/AFP via Getty Images)
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."

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