/biz/ - Business & Finance

[Anonymous No.12556763]

Chainlink could supplant the LIBOR system entirely, making it impossible to manipulate, because there is no LIBOR to manipulate.

LIBOR is just a telephone poll of banks on how much they'd lend money to other banks for varying amounts of time. Just have every bank (Barclays, BofA, Citi, etc.) post their lending rates on an API. This means the data is also out in the public and transparent. False advertising if they post a rate that they can't commit to. LIBOR is opaque. Who knows what numbers each individual bank is giving LIBOR to create the average?

This way, everything is out in the open, and a smart contract could do the averaging on its own. LIBOR was created in the 1980s when data dissemination wasn't even close to the capabilities that we have now. It's a freaking telephone poll.


Post it all publicly on an API and have the oracles validate it. A smart contract could then poll a sampling of those rates and calculate "LIBOR" or whatever we want to call its replacement.

Huge implications for OTC derivatives and the bond market.

[Anonymous No.12556813]

>>12556763
LIBOR serves as a globally accepted key benchmark interest rate that indicates how much does it costs to the banks to borrow from each other. It is used as the necessary reference rate for transacting in the global markets worth more than $350 trillion and comprises of various financial products that include interest rate swaps, forward rate agreements, mortgages and commerical loans.

While LIBOR has been a long established global benchmark standard for interest rate, it has had its fair share of controversies including a major scandal of rate rigging. Prior to 2009, major banks allegedly colluded to manipulate the LIBOR rates. They took into account traders' requests and submitted artificially low LIBOR rates to keep them at their preferred levels. The intention behind the alleged malpractice was to bump up traders’ profits who were holding positions in LIBOR-based financial securities.

[Anonymous No.12556817]

This anon fucks. Bump

[Anonymous No.12556822]

>>12556813
Though LIBOR is globally accepted, there are other similar regional interest rates that are popularly followed across the globe. For instance, Europe has the European Interbank Offered Rate (EURIBOR), Asian major economy Japan has the Tokyo Interbank Offered Rate (TIBOR), China has Shanghai Interbank Offered Rate (SHIBOR) and India has Mumbai Interbank Offered Rate (MIBOR).

Imagine Chainlink with them all.

[Anonymous No.12556864]

>>12556822
imagine is all youre gunna get for a while man, imagine the imense changes that have to happen for that to become true. I dont doubt it will happen but i wont be suprised if it takes 10-15-20 years

[Anonymous No.12556865]

>>12556763
Boom Boom Bump. Based!

[Anonymous No.12556889]

https://silkthreads.press/2019/01/06/edmund-jm-dunne-twitter-archives/

"Edmund is a Barclays investment banker that survived the long string of suspicious banker deaths surrounding the LIBOR scandal. Edmund was found trapped in tortuous isolation and living conditions, in the countryside of Ireland, on the estate of aristocracy suffering severely from trauma."
LIBOR WTF????

[Anonymous No.12556925]

A scramble to replace LIBOR is under way

The Fed has created a new benchmark dollar interest rate, the Secured Overnight Financing Rate (SOFR) and central banks in Britain, the euro zone, Japan and Switzerland are also constructing new benchmark rates.

https://www.economist.com/finance-and-economics/2018/09/29/a-scramble-to-replace-libor-is-under-way