Three cheers for the gaming of Libor

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A CONVENIENT FICTION: Hang on. Is anyone surprised that at the depth of the 2008 credit crunch, when banks basically had no clue what their counterparties’ assets were really worth, that the fudging of Libor that went on happened at the explicit direction of governments and central banks? I’m not. In fact, I thought the fudging was a good idea. If people had seen what the real, unrigged Libor was back then, they would have been even jumpier than they already were. Sometimes a little white lie can help a lot.