In June 2008, ICAP actually launched a US-based alternative to LIBOR. It ended up as nothing more than one very minor footnote lost in a sea of more pressing problems and events. Still, that they even tried is somewhat significant and relevant to today.

Before the whole cheating scandal came out, there were questions surrounding just what LIBOR was indicating. The major difference for this upstart New York Funding Rate (NYFR) was it as a mid-rate rather than an own-rate. In truth, this wasn’t really much of a distinction at all, but at the time it seemed important to certain people (at ICAP, apparently, encouraged by others).

Though it was a New York survey, they were still interested about conditions in the eurodollar market (though I still can’t figure out how and why nobody ever seemed to appreciate the full ramifications of what that meant). At odds was the feeling banks handing in their LIBOR panels to the British Bankers Association might have been shy about doing so because it reflected their “own” borrowing costs. Possible stigma about being more honest, and potentially making things worse, led some to suspect LIBOR wasn’t a true enough picture of funding conditions if individual firms were ever tempted to fudge.

NYFR would, in theory, fix that by asking participants what they thought any A1/P1 institution might be able to fund at during heaviest eurodollar trading early on in each New York session (while London was still going). This removed any potential stigma and for a brief time was thought to be a better unsecured notation.

If you are to specify exactly when the panic portion of the Global Financial Crisis began, surely it was on September 29, 2008. Global stocks markets commenced their crash liquidations that day, and given the significant events surrounding them the FOMC held another emergency conference call as all that started to unfold. Addressing things like LIBOR-OIS, Open Market boss Bill Dudley also noted: