Treasury: LIBOR process flawed, poses risk

WASHINGTON – A government report says the process for setting a key global interest rate is flawed and poses a risk to the stability of financial markets.

The Treasury Department report says banks are capable of manipulating the London interbank offered rate (LIBOR), which affects interest on many loans.

The warning comes just weeks after Barclays bank admitted it had submitted false information to keep the rate low. The bank agreed to pay a $453 million fine.