The process for setting a key global interest rate is flawed and poses a risk to the stability of financial markets, according to a report from the U.S. Treasury Department.
Banks are capable of manipulating the London interbank offered rate (LIBOR), the Treasury’s Office of Financial Research said in the report released Friday.
The LIBOR rate affects interest on many loans. The report’s warning comes three weeks after Britain’s Barclays bank admitted it had submitted false information to keep the rate low.
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