Week InReview: December 2, 2016

"Zombanakis and his team came up with a solution: charging borrowers an interest rate recalculated every few months and funding the loan with a series of rolling deposits. The formula was simple. The banks in the syndicate would report their funding costs just ­before a loan-rollover date. The weighted average, rounded to the nearest eighth of a percentage point plus a spread for profit, became the price of the loan for the next period. Zombanakis called it the London interbank offered rate."

An excerpt from Gavin Finch and Liam Vaughan's forthcoming Libor scandal book "The Fix" describing the 1969 invention of Libor by Manufacturers Hanover banker Minos Zombanakis as a way o make floating-rate syndicated loans

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