Financial Market Misconduct and Public Enforcement: The Case of Libor Manipulation

Priyank Gandhi, Benjamin Golez, Jens Carsten Jackwerth and Alberto Plazzi
Additional contact information
Benjamin Golez: University of Notre Dame
Jens Carsten Jackwerth: University of Konstanz

No 17-53, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Using comprehensive data on London Interbank Offer Rate (Libor) submissions from 2001 through 2012, we document systematic evidence consistent with banks manipulating Libor to profit from Libor related positions and, to a degree, to signal their creditworthiness during the distressed times for banks. The evidence is initially stronger for banks that were eventually sanctioned by the regulators and disappears for all banks post-2010 in the aftermath of Libor investigations. Our findings suggest that public enforcement, with the threat of large penalties and the loss of reputation, can be effective in deterring financial market misconduct.

Keywords: Libor; manipulation; financial market misconduct; enforcement (search for similar items in EconPapers)
JEL-codes: G11 G12 K42 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2017-12
New Economics Papers: this item is included in nep-law
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Financial Market Misconduct and Public Enforcement: The Case of Libor Manipulation (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1753

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