Mr Goodman, known as "Lord Libor", insisted that he never expected banks, which every day sent their estimated costs of borrowing funds in a variety of currencies to the administrator of the Libor rate, to match his predictions.
"Easy money" policies on the part of the central bank, whereby the cost of borrowed funds and their availability are indirectly regulated in such a way as to encourage business borrowing, may lead to higher levels of real investment.
Buyers in some parts of the country have benefited from rising house prices and rents, and low interest rates have made the cost of borrowing to fund a purchase cheaper than ever.
If the interest rate were higher, investment would be unprofitable because the cost of borrowing the necessary funds would exceed the returns on the investment.
Additionally, these entities tend not to be as "blue chip" as traditional banks, and lower credit ratings translate to higher overall costs of borrowing if funds are sourced from capital markets.
As a report by the British North-American Committee (BNAC), a group of businessmen, academics and parliamentarians, points out, when a scheme is unfunded, the employer is, in effect, avoiding the cost of borrowing the money to fund the plan.
Poor countries are fighting a proposal by the leading industrial nations to increase the cost of borrowing from the International Monetary Fund and the World Bank, dealing a blow to a campaign by Secretary of the Treasury Lawrence H. Summers to change the lending agencies.
With interest rates still close to zero, the cost of borrowing the money needed to fund such spending would be negligible.
