For about 50 years, the London interbank offered rate (LIBOR) has helped determine the cost of borrowing around the world, from student loans and mortgages to interest-rate swaps and collateralized loan obligations (CLOs).

Derived from a daily survey of bankers who estimate how much they would charge each other to borrow, LIBOR was simple, effective, ubiquitous, and seemingly reliable.

However, as markets evolved, the trading that helped inform those estimates dried up. In the wake of the 2008 financial crisis, regulators discovered that the banks trusted to set the rates underpinning hundreds of trillions of dollars of financial assets had been manipulating them to their advantage.

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