The Fix

Introduction

There were four of us at a table by the bar, eyeing each other with suspicion: two reporters, a highly paid derivatives trader in his early thirties, and a lawyer who had cautiously brokered the meeting. We'd just written a story about how the trader and a handful of his colleagues had been sacked, and he was incensed. His reputation was ruined, and he was aggravated by what he saw as the fundamental ignorance of the press. Did we even understand what Libor was? Did we understand what Libor had become?

On that chilly afternoon in February 2012, at a near-empty hotel bar in central London, the word “Libor” had not yet entered the public vernacular. In the world of finance, it was common. Libor was the name of a benchmark interest rate, one that was both mundane—it was just a measure of how much it cost banks to borrow from each other—and extraordinary. Libor was in everything, from mortgages in Alabama to business loans in Liverpool to the hundreds of billions of dollars in bailout money given to banks during the financial crisis. It was sometimes called the “world's most important number”, and the trader sitting across from us was accused of trying to manipulate it.¹ From his body language it was clear he didn't want to be here, but he was desperate. So were we. We didn't even know his name.²

“Why do you need to know that?” he snapped when we asked. He had heavy bags under his dark, narrow eyes. All we needed to appreciate, the trader insisted, was that Libor wasn't ...