joining us is matt o'brien.nks for joining us. >> good to be here. >> eliot: whywhat is libor and what does it matter. >> it's the amount that banks borrow from each other at. i say supposed to be. banks say what they think they can borrow from other banks at. they take a panel of say 16 banks and take the medium guesses and average them out. >> eliot: libor stands for london interbank borrowing rate. the debt around the world is pegged to what libor is. >> exactly. the interest rate you pay on your mortgage may fend on what libor. now it also matters because it's a sign of financial distress there is. you know, banks depend on confidence. if banks don't have the confidence to lend to each other the system will collapse. >> eliot: there is a thing called credit default swaps at the center of the aig scandal. when libor goes up, that means that banks pay more and they have an interest in manipulating this thing. >> the problem is what they say they think i can borrow at. if you look back at the crisis you find ou