Prompt Cast
The Rise of Ameribor as a Replacement for LIBOR
TLDR Dr. Richard Sandor, also known as Doc, is working on creating Ameribor as a transparent and less riggable interest rate to replace LIBOR, which was manipulated by banks during the 2008 financial crisis. Ameribor is gaining traction as a potential replacement for LIBOR, with over 180 banks already signed on to the new system.
Timestamped Summary
00:00
Dr. Richard Sandor, known as Doc, realized that the LIBOR scandal was a game changer and decided to take action to fix the broken system.
04:06
LIBOR, the benchmark interest rate that banks use to determine borrowing costs, originated in 1969 as a way to price a loan to the Shah of Iran, and eventually became a crucial factor in determining interest rates for various financial transactions.
07:44
Banks used the average cost of lending money to each other to establish the benchmark interest rate LIBOR, which eventually became widely used in various financial transactions.
11:04
The financial crisis of 2008 revealed that the LIBOR rate was manipulated by banks colluding with each other, impacting millions of people who relied on it for the pricing of goods and services.
14:48
DOC aims to create a new transparent and less riggable interest rate called Ameribor, primarily focused on American banks, by personally convincing regional banks to participate in real transactions.
18:41
DOC, the father of financial futures, is working on creating a LIBOR replacement called Ameribor by setting up an exchange where regional banks can exchange money, with over 180 banks already signed on.
22:08
Michelle's bank is preparing to stop using LIBOR in new contracts and is considering options like Ameribor, SOFR, and Bisbee as replacements.
25:24
Ameribor is not a complete replacement for LIBOR, but rather one of the many options available as banks transition away from using LIBOR in new contracts by the end of 2021.
