The Spider Network

The Spider Network – David Enrich

LIBOR, the London Interbank Offered Rate, was once called the world’s most important number. It was used to set interest rates on hundreds of trillions of dollars of loans, mortgages and financial contracts around the world. In The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History, journalist David Enrich, then of the Wall Street Journal, tells the inside story of how this benchmark was manipulated.

At the center of the story is Tom Hayes, a brilliant but socially awkward derivatives trader who worked for UBS and later Citigroup in Tokyo. Hayes built an extensive network of contacts among traders and brokers at other banks, whom he pressed to help nudge LIBOR rates in directions that benefited his trading positions. His network became so extensive that colleagues described him as the center of a web.

Enrich describes the culture of the trading floors and broker firms where such practices flourished, the colorful and sometimes outrageous characters involved, and the way that manipulating the rate became, in the words of some participants, a routine part of business. He then follows the investigation that followed, as regulators and prosecutors in the United Kingdom and the United States uncovered the scheme, and Hayes became the first person convicted in the scandal, while questions remained about how far responsibility reached within the banks.

Based on extensive interviews and documents, the book reads like a thriller and raises questions about accountability in the financial industry.

The Spider Network is a gripping read for anyone interested in finance, business and white-collar crime.