A: The rigging of interest rates sounded so fantastical, I couldn’t believe it was happening on such a wide scale. Could $300 trillion worth of securities really be pegged to one obscure interest rate? Then in 2012, I read about how Barclays was the first to admit that its traders were manipulating the London rate, and I wanted to understand how it affected consumers around the world. What an eye-opener… like discovering the equator had been measured at the wrong latitude.

Q: How long did it take to research and write the book? How many interviews did you need to conduct? Was it difficult to win over the trust of the people you are writing about?

A: From start to finish, the book required two years of research and writing, nearly a hundred interviews and reading tens of thousands of pages of U.S. and U.K. government documents and witness testimony. Many of the lawyers suing on behalf of cities and mortgage holders were extremely helpful; the traders were very difficult to talk to, since they implicated their bosses in some cases.

Q: What were the most surprising things you learned during your research and writing?

A:  I was surprised how young and low-ranking were the traders now on trial, and how these young men and women were so quickly sacrificed by the top brass. In the cases of Barclays, UBS, Rabobank and Deutsche Bank, the CEOs argue ignorance of what was going on in the rank-and-file, when in fact, they tolerated or even encouraged the rigging of interest rates if it was bringing in revenue. (See especially UBS and Deutsche Bank). The tiny Dutch firm Rabobank was among the worst offenders. In the case of Lloyds, they’ve suspended a young woman on the money-market desk. Can we honestly believe this was the work of one person?

Another surprise? Traders were rigging the interest rate both upwards and down – depending on whom they owed favors. In some cases, their hedge fund clients were asking them to!

Finally, I was shocked at how chummy the Bank of England, the Federal Reserve and the heads of the big banks were – and are. Who is regulating whom?

Q: How does this affect the average person? Why should we care that LIBOR is used instead of a different number?

A: Have you borrowed money for college? Most student loans are pegged to LIBOR, so in prior years you were likely paying a rigged interest rate. Did you pay too much or too little every month?

LIBOR rates are the most common benchmarks for U.S. adjustable-rate mortgages, including Fannie Mae and Freddie Mac, and mutual funds. Did you pay an extra $100 a month on your home payment or did you earn too little on your money market fund?

And cities like Philadelphia, Oakland and Houston hedge their municipal bonds and other borrowings with interest rate bets; in many cases the banks rigged the LIBOR rate to ensure these towns and other borrowers weren’t paid enough on their hedges.

Q: What is the U.S. government trying to do about LIBOR? What about other nations—are their governments getting involved as well?

A:  The CFTC chairman Gary Gensler tried exceedingly hard to fix the LIBOR, crisscrossing the globe to plead his case for fixing LIBOR – changing from a survey rate with no real transactions, to something that was true and transparent. He angered so many people in Washington and Wall Street that President Obama didn’t re-nominate Gensler for a second term. The City of London has lost oversight of LIBOR to the owners of the New York Stock Exchange, an outfit known as ICE, run by Jeff Sprecher.

Q: The first person involved in the LIBOR scandal was just sentenced — Tom Hayes. What is the significance of Hayes and his 14-year sentence this week?

A:  Hayes was super successful – and made a lot of money personally and for his employers – by rigging interest rates. But he’s really just the first one to get caught. British regulators made an example out of him, but he’s far too clever to take the fall alone. Hayes testified that the LIBOR rate rigging goes much higher than any one bank’s trading desk – much higher up in the executive suite. His 14 year sentence will likely be reduced. I’m waiting for C-suite executives at the banks to be indicted. In my dreams!

Q: What should be the lesson that the world takes away from the LIBOR scandal?

A:  About a dozen Wall Street and City of London firms have been fined $12 billion for rigging LIBOR and related rates. But I don’t think it will change the way they do business with clients. The lesson is: banks work for their own bottom line, not for the customer.

And, oh yeah, the book, “Open Secret”: