Heat that led to Libor fix came from the top

On Wednesday October 8, 2008, Gordon Brown, the prime minister, announced £50 billion in emergency funding to recapitalise UK banks. The same day, amid what The Times called a “crippling logjam in credit markets”, six central banks, including the US Federal Reserve, the European Central Bank and the Bank of England, launched a co-ordinated cut in official interest rates.

With higher Libor, the rate that was meant to show the price banks were paying to lend to each other, it looked like this unprecedented intervention was not working. Markets around the world were in a full-blown panic, with share prices plummeting.

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