Markets as beauty contests

24 Aug, 2017 at 08:25 | Posted in Economics | 1 Comment


1 Comment

  1. It’s funny that they talk of LIBOR without mentioning that traders were setting bank borrowing costs arbitrarily low via emails. Prices are arbitrary, set by traders talking to each other in chatrooms. Even after UBS vowed to have changed their culture after their Report to Shareholders on the write-downs of MBS after 2008, the LIBOR scandal was ongoing and remained undiscovered (or tolerated) for several years. I was just perusing the Fed’s recent press releases and they talk of trader collusion, an on-going problem it seems, this time in the currency swap markets.

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