Fixing the LIBOR
Authorities in the United Kingdom have vowed to fix the 'broken' London interbank offered rates (LIBOR) system, a move that will have its repurcussions on Indian industry. A look at the genesis of the LIBOR scandal and its global implications:
What is LIBOR: It is the interest rate at which banks can borrow funds from other banks in the London interbank market. LIBOR is set daily by a panel of banks on the basis of the rate at which they think they might be able to borrow from the markets. The British Bankers' Association oversees the process. LIBOR rates are an international benchmark to which hundreds of trillions of dollars in loans are tied.
What the problem was: Banks are accused of submitting rates not reflecting the price at which they might have been able to borrow during the 2008 credit crunch. Multiple banks are charged with trying to manipulate and suppress LIBOR rates in order to profit unfairly in derivatives trading. It could also have made the banking system appear healthier than it was during the 2008 crisis.
What is proposed: Britain's top financial watchdog, Financial Services Authority (FSA), has promised to overhaul a "broken" LIBOR interest rate system. It plans to bring LIBOR under an independent regulator to remove the perception that the system is run by banks.
Implications for India: The probe into the scam could lead to the resetting of LIBOR rates. The developments will be closely followed by Indian companies which had raised $104.4 billion until March 2012 through external commercial borrowings, about a third of the country's total external debt of $345.82 billion.
Compiled by Basudha Das
Most UK colleges swear by tradition and the prestigious Cambridge University is no exception. However, there's one British ritual the university doesn't want its students to follow - binge drinking! A video will be shown to students asserting that 'there might be rules and traditions, but you don't need to join in'. It comes less than five months after Cambridge students made a spectacle of themselves at a public park in May following a drinking spree during the annual Caesarian Sunday event.
Save that Bottle
If you are super rich and want to pamper yourself, you could consider buying a bottle of Ruwa. It is the most expensive nonalcoholic drink available at Rs 24 crore a bottle. UK-based Beverage Company created the drink largely for the United Arab Emirates where liquor is banned. But It is the bottle, not the beverage, which accounts for the price tag. The crystal decanter is encrusted with 8,000 diamonds, 200 rubies and two bars of white gold.
Wait Gets Longer
JSW Steel's proposed three million tonne steel plant in West Bengal is likely to be further delayed with the Gourangdih ABC coal block, given jointly to the Sajjan Jindal-led firm and Himachal EMTA Power Ltd, being de-allocated. The plant had faced land acquisition problems earlier. The block is among those mentioned in the CAG report on the coal scam. The coal was to feed a captive power plant for the steel project.