“Libor may be dodgy, stop using it,” TARP watchdog tells Treasury and Fed

A link from Reuters

After London bankers were charged with rigging Libor – the benchmark interest rate that was used as a reference for most government bailouts between 2007-2009 – the measure may no longer be reliable. This is the opinion of the special inspector-general for the Troubled Asset Relief Program (TARP), the bailout vehicle launched during the financial crisis. The inspector, Christy Romero, said the Fed and Treasury should stop using Libor in TARP programs, as doing so could put taxpayer money at risk and undermine confidence in any future bailouts. Libor has faced intense scrutiny since British bank Barclays agreed to pay more than $450 million in fines to American and UK authorities to settle charges some of its staff rigged the interest rate at the height of the financial crisis.