This article focuses on the LIBOR manipulation scandal officially revealed by the U.S. and U.K. authorities in June 2012. The article indicates that this scandal is in reality an outcome of the financial efficiency problem in the developed markets along with other reasons. LIBOR is a widely used...

This paper extends the benchmark Estrella and Hardouvelis (1991) term spread approach to recession forecasting by including the stock market macro liquidity deviation factor. We use a probit framework to predict US business cycles, as defined by the NBER between 1959Q1 and 2011Q4. We find that...