Huff Post - Mark Gongloff, 9/19/12
Interest rates all over the world are mostly made up. That's the verdict of a new study by the International Organization of Securities Commissions, a copy of which was obtained by Bloomberg. It found that more than half of the benchmark lending rates in the U.S., Europe and Asia are "calculated by methodologies that were unclear, not transparent and only rarely subject to specific regulatory standards or obligations." Less than half of all benchmark lending rates, in contrast, were based on actual market transactions.
In other words, the interest rates that affect personal and business loans, and hundreds of trillions of dollars in derivatives contracts around the world, are based on either guesses or lies: Not particularly comforting.
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