Two University of Minnesota graduate students released a paper in April 2010 that suggested that Libor was being manipulated by leading global banks to benefit their own trading positions.
Students Connan Snider and Thomas Youle were repeatedly turned down by academic finance journals in their attempts to publish their paper, RIA Novosti reports.
“We were told that what we were doing was not interesting or important,” Snider, now an assistant professor of economics at UCLA, said, according to RIA Novosti.
Barclays paid a $470 million settlement this summer to U.S. and British authorities over its manipulations of Libor, the world’s leading lending rate, and admitted that it had manipulated Libor to improve its financial position.
As a result of Barclays revelation, regulators around the world began investigating possible rate-rigging by leading banks.
The London Interbank Offered Rate, or Libor, is the average interest rate utilized by top banks in estimating borrowing money from other banks. The rate, adjusted daily, is used to set interest rates for a wide variety of financial products and commercial markets.
States and localities in the United States are estimated to have lost at least $6 billion on financial contracts purchased before the credit crisis as a result of Libor manipulation.