What was the consequence of the LIBOR scandal?

The consequence of the LIBOR scandal was the discovery of banks manipulating interest rates for profit. The scandal revealed that several major banks were colluding to manipulate the London Interbank Offered Rate (LIBOR), which is a crucial benchmark for setting interest rates on various financial products worldwide. This manipulation occurred primarily to benefit their own positions or to create a more favorable financial appearance during times of economic stress. The scandal raised significant concerns regarding the integrity of financial benchmarks and the ethical standards within the banking industry.

As a direct result of the findings from the scandal, there was heightened scrutiny on financial institutions and their practices in rate-setting. This led to widespread reforms in the financial markets aimed at enhancing transparency and restoring trust in the processes by which interest rates are determined. Consequently, while the actual manipulation itself was a serious negative outcome, the subsequent reactions from regulators and the industry focused on rebuilding confidence in financial markets.