What is the main message of The Spider Network?

The main message of The Spider Network is the shocking story of the Libor scandal and the mastermind behind it.

How long does it take to read The Spider Network?

The reading time for The Spider Network varies depending on the reader's speed. However, the Blinkist summary can be read in just 15 minutes.

Who is the author of The Spider Network?

The author of The Spider Network is David Enrich.

Money & Investments

The Spider Network Book Summary - The Spider Network Book explained in key points

Listen to the Intro

00:00

The Spider Network summary

Name: The Spider Network
Rating: 4.3 (81 reviews)
Author: David Enrich

David Enrich

The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History

4.3 (81 ratings)

18 mins

Brief summary

"The Spider Network" by David Enrich is a true story of a group of bankers who rigged the LIBOR (interest rate) system and their ultimate downfall. It gives an insight into the unregulated world of global finance.

Topics

Biographies Investments

Table of Contents

The Spider Network
Summary of 7 key ideas

Audio & text in the Blinkist app

Key idea 1 of 7

What’s in it for me? See behind the scenes of a corrupt and broken banking system.

After the 2008 financial crisis, people were eager to see rich bankers get locked away for their careless toying with the financial system. But when things come crashing down, is it fair to blame the individuals who work in finance, or should we rather look at how the banking system is set up?

These blinks try to answer this question by telling the story of Tom Hayes, the infamous math wiz who ended up taking the fall for the banking industry’s reckless habit of manipulating interest rates. From the innocent lunch-money deals he made as a teenager to him being designated the criminal mastermind of the “Spider Network,” Hayes’s story is laid out in full. You’ll learn how the most common benchmark interest rate index in the world – Libor – was manipulated, and what happens when traders, brokers and bank executives are left to operate without oversight.

You’ll also learn

how Hayes’s mild Asperger’s got him in trouble;
that Hayes managed to make $10 million in just one day;
why Hayes was the only banker to be convicted.

Tom Hayes was always good with numbers, but he had trouble making friends.

Even as a child, Tom Hayes had a knack for numbers and knew how to cut a favorable deal.

In 1995, when he was just 15 years old and living in Winchester, England, Hayes lent his lunch money to a friend with a 50-percent interest rate. This way, for every five pounds he loaned out, Hayes would earn himself a nice profit of £2.50.

Around this time, he also became fascinated with the slot machines that could be found at local pubs. Hayes would watch one intently, figure out its pattern and always jump in at the right time to win a payout.

Unfortunately, Hayes’s mathematical ingenuity seemed to come at a cost, as he was always bad at socializing and making friends.

During his days at school, Hayes was bullied for his tendency to dress quite neatly, with a sharp blazer.

Lacking a positive male role model didn’t help matters, either. After cheating on his mom, Hayes’s father left the picture quite early on.

But the reason Hayes struggled with relationships was likely a mild and undiagnosed form of Asperger's.

All the symptoms were there: He could focus intensely on complex mathematical problems, he always avoided making eye contact and when he was upset, he could snap into a fit of rage.

What comforted Hayes was the reliable logic of math, and that’s what drew him toward the stock market.

In 1999, while at the University of Nottingham, he interned at UBS, an international Swiss bank, and learned some of the basics of trading stocks and bonds. From there, Hayes became hooked on the intricate world of finance and, in the fall of 2001, landed a permanent job at the Royal Bank of Scotland.

Libor is a confusing but important interest rate that is closely tied to the derivatives market.

While working at the Royal Bank of Scotland, Hayes was introduced to the complicated business of Libor, a common benchmark that stands for London Interbank Offered Rate and is used around the world to determine interest rates.

Libor is determined by having certain banks around London regularly submit the average rate of what it costs for them to borrow money. This rate essentially reflects how much other banks are charging them to take out a loan. Once these numbers are submitted, they’re averaged out, and this figure becomes the current Libor, which is used as a benchmark for a variety of purposes, such as mortgages.

Hayes became part of a large international group that manipulated Libor rates to benefit the holdings of their banks.

Tom Hayes quickly became a success in finance. It was like his brain was perfectly wired for this kind of work. So, in 2006, after making millions for the Royal Bank of Scotland, he accepted an offer to work for UBS, but this time for their branch in Japan.

Hayes continued to prove how well his math skills could be put to work in the complex world of derivatives and fluctuating interest rates. He became so adept at navigating the Japanese market that his name was soon recognized as a powerful force in that part of the financial world.

Complicit banks enabled Libor manipulation for years, earning Hayes and UBS millions.

So how did Hayes compensate the brokers for going along with his scheme? One of his go-to rewards was a switch trade.

This involves two traders, Trader A and Trader B, using a broker to set up a million-dollar trade. First, the trade would go in one direction, from A to B, and then a short while later the same exact trade would be made in the other direction, from B to A.

After Hayes left the toxic environment of UBS, people began to notice Libor’s strange behavior.

At this point of the story, it’s important to keep Hayes’s personality in mind and remember that, ever since he was a kid, he’d had a hard time making friends.

This problem continued into his adult life, and you could even say it grew worse in the banks’ aggressively macho work environment, where people casually curse up a storm and enjoy coming up with offensive nicknames for each other.

Tom Hayes, confused and angry, was betrayed by his former colleagues as the Libor investigation came to a close.

Just before Hayes turned 30, Britain’s Barclays bank responded to the CFTC’s request for information with direct evidence of their Libor tampering. Hoping for leniency by being as cooperative as possible, Barclays even included a recording of two Barclays employees talking about receiving executive orders to manipulate Libor.

It was now becoming clear that the banking industry was home to a new kind of rampant, systemic wrongdoing. And, as more evidence came in, Hayes found himself being singled out as the one “bad apple” behind it all.

Tom Hayes was a scapegoat for a corrupt and broken banking system.

The truth is, it took a lot of cooperative and coordinated effort for Libor rates to be adjusted so that Hayes and others could benefit from them. While Tom Hayes may have been a difficult person to work with, the Libor scandal happened because the financial system taught brokers and traders to make money however they could.

Nevertheless, when it came time for a verdict, Hayes was the only one to be convicted, and it wasn’t a mere slap on the wrist: he was sentenced to 14 years in prison.

Want to see all full key ideas from The Spider Network?

Key ideas in The Spider Network

More knowledge in less time

Read or listen

Get the key ideas from nonfiction bestsellers in minutes, not hours.

Find your next read

Get book lists curated by experts and personalized recommendations.

Shortcasts ^New

We’ve teamed up with podcast creators to bring you key insights from podcasts.

What is The Spider Network about?

The Spider Network (2017) tells the fascinating story of Tom Hayes, the man who took the fall for the banking industry’s secret habit of manipulating interest rates. It’s a tale of what happens when traders, brokers and bank executives are allowed to operate without oversight.

The Spider Network Review

The Spider Network by David Enrich (2017) is a captivating account of the infamous Libor scandal and the characters involved. Here's why it's worth reading:

With detailed research and first-hand interviews, it offers a comprehensive look into the complex world of global finance and the people who manipulated it.
The book exposes the moral ambiguities and ethical dilemmas faced by individuals working in high-stakes industries, making it a thought-provoking read.
Enrich's skillful storytelling keeps the narrative engaging, ensuring that this non-fiction book is anything but boring.

Best quote from The Spider Network

[Hayes] reminded a colleague of the Neo character in the Matrix trilogy: He could just see the numbers.

—David Enrich

Who should read The Spider Network?

Traders, brokers and anyone interested in the stock market
Investors hoping to avoid getting fleeced
Fans of a good corporate crime story

About the Author

David Enrich is the Financial Enterprise Editor for the Wall Street Journal, where he leads a team of investigative journalists. His reporting has won a number of awards, including the 2016 Gerald Loeb Award for his work on the Libor scandal, which he expanded into his book, The Spider Network.

Categories with The Spider Network

Money & Investments Biography & Memoir

Book summaries like The Spider Network

Strategic Connections

Anne Baber

The New Face of Networking in a Collaborative World

14 min

3.8

Skin in the Game

Nassim Nicholas Taleb

Hidden Asymmetries in Daily Life

18 min

4.1

Saving Aziz

Chad Robichaux with David L. Thomas

How the Mission to Help One Became a Calling to Rescue Thousands from the Taliban

16 min

4.1

How to Be a Power Connector

Judy Robinett

The 5+50+100 Rule for Turning Your Business Network into Profits

18 min

4.2

The Smartest Guys in the Room

Bethany Mclean

The Amazing Rise and Scandalous Fall of Enron

The Art of Risking Everything

15 min

4.0

What Every BODY is Saying

Joe Navarro

An Ex-FBI Agent’s Guide to Speed-Reading People

Create a Digital, Scalable, Valuable and Fun Business That Will Thrive in a Fast Changing World

Understanding Self-Motivation

22 min

4.3

A Guide to the Good Life

William B. Irvine

The Ancient Art of Stoic Joy

Optimize Your Brain to Transform the Way You Work

What We Should Know about the People We Don’t Know

How Stories Go Viral and Drive Major Economic Events

25 min

4.3

Children of Ash and Elm

Neil Price

A History of the Vikings

20 min

4.1

Never Split the Difference

Chris Voss and Tahl Raz

Negotiating As If Your Life Depended On It

19 min

4.4

Thinking, Fast and Slow

Daniel Kahneman

Intuition or deliberation? Where you can (and can't) trust your brain

28 min

4.5

Make Your Art No Matter What

Beth Pickens

Moving Beyond Creative Hurdles

16 min

High Growth Handbook

Elad Gil

Scaling Startups from 10 to 10,000 People

16 min

How to Think Like Leonardo da Vinci

Michael J. Gelb

Seven Steps to Genius Every Day

Mastering Search Engine Optimization

How To Make Offers So Good People Feel Stupid Saying No

How Donald Trump Squandered His Father's Fortune and Created the Illusion of Success

An uncommon guide to rapid fat-loss, incredible sex and becoming superhuman

A History from Socrates to Social Media

27 min

4.4

The 33 Strategies of War

Robert Greene

A Comprehensive Guide to the Subtle Social Game of Everyday Life

A Brief History of Information Networks from the Stone Age to AI

An Indigenous Vision for Seeking Wholeness Every Day

19 min

3.3

I Hate Job Interviews

Sam Owens

Stop Stressing. Start Performing. Get the Job You Want.

16 min

When the Clock Broke

John Ganz

Con Men, Conspiracists, and How America Cracked Up in the Early 1990s

Your Body Clock and Its Essential Roles in Good Health and Sleep

20 min

The Human Condition

Hannah Arendt

Uncover the Dangers of Humanity’s Increasing Capabilities

Why You're Not Built for Constant Happiness, and How to Enjoy the Journey

18 min

4.1

The Anxious Generation

Jonathan Haidt

How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness

Getting Things Done with Others

Decoding The Science of Ultimate Human Performance

19 min

4.4

Good Strategy, Bad Strategy

Richard Rumelt

The Difference and Why It Matters

A master class in strategic thinking

Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue

An Exploration of the Parallels Between Modern Physics and Eastern Mysticism

The Curious Science of Everyday Lives

14 min

3.6

The Intelligent Investor

Benjamin Graham and comments by Jason Zweig

The Definitive Book on Value Investing

Why It Pays to Break the Rules at Work and in Life

A Guide To Spiritual Enlightenment

Design Your Business to Run Itself

Holding Your Seat through Life's Eight Worldly Winds

366 Meditations on Power, Seduction, Mastery, Strategy, and Human Nature

30 min

4.4

The Communist Manifesto

Karl Marx and Friedrich Engels

Workers of the world unite!

15 min

4.2

Meditations for Mortals

Oliver Burkeman

Four Weeks to Embrace Your Limitations and Make Time for What Counts

Stop Drama, Eliminate Entitlement, Maximize Results

19 min

4.2

People ❤️ Blinkist

Sven O.

It's highly addictive to get core insights on personally relevant topics without repetition or triviality. Added to that the apps ability to suggest kindred interests opens up a foundation of knowledge.

Thi Viet Quynh N.

Great app. Good selection of book summaries you can read or listen to while commuting. Instead of scrolling through your social media news feed, this is a much better way to spend your spare time in my opinion.

Jonathan A.

Life changing. The concept of being able to grasp a book's main point in such a short time truly opens multiple opportunities to grow every area of your life at a faster rate.

Renee D.

Great app. Addicting. Perfect for wait times, morning coffee, evening before bed. Extremely well written, thorough, easy to use.