Every day, 16 banks say how much it might cost them to borrow in various currencies, for various lengths of time. The four highest and four lowest figures are discarded, and the average of the remaining eight become that day’s Libor. In this toy model of how Libor works, you have total control over how one bank sets its rates, and some random partial influence on other banks, who will tend to follow you. Move your mouse along the axis to set your rate. Read the full story