Question

How did traders benefit from manipulating LIBOR in the case of Barclays and LIBOR: Anatomy of a Scandal?

Answer 1

In Barclay’s case, traders influenced the other Barclay's department who were responsible for setting the rate of LIBOR. Moreover few traders at Barclays coordinated with other banks for the alternation of their rates too. Therefore LIBOR was being set in an approach which made loans and derivatives more profitable. Barclays manipulated Libor downward by stating that the Libor calculators that it could borrow money at low rates to make the bank's picture to be less risky and insulate itself. The artificial high or low or rates of interest was done to benefit their derivatives traders.