|-|So why has the LIBOR been in the news recently? Well, it turns out that the LIBOR is calculated not by looking at the supply and demand of actual interbank loans, but instead by asking large banks what they think the LIBOR is. This system isn' t necessarily problematic, however, as long as the banks whose opinions determine the LIBOR don't have an incentive to either under or overstate the true rate of interest. Unfortunately, banks have a number of lines of business whose profits are very much affected by interest rates, so there are pretty strong incentives to manipulate these interest rate reports in order to benefit the banks, even when this happens at the expense of others. |+|
is the of , ', , the to the of . a of , , .