Why rigging of the bank bill swap rate hurts everyone
by Dr. Andy Schmulow
NZ Bankʼs alleged manipulation of the bank bill swap reference rate (BBSW) is Australiaʼs version of the LIBOR debacle.
The workings of BBSW, like LIBOR, make for a very complex story. BBSW is similar to LIBOR (London Interbank Offer Rate), in that itʼs used to set rates on hundreds of trillions of dollars (yes, hundreds of trillions) worth of transactions, including interest rates on credit cards, student loans and mortgages.