libor scandal - London interbank offered rate manipulation

[manimal]

http://www.foxbusiness.com/news/201...minister-denies-boe-contact-in-libor-scandal/

Fox reporting

http://www.commondreams.org/view/2012/07/09-5

Common Dreams article


http://nation.foxnews.com/wall-street/2012/07/06/gasparino-may-send-wall-streeters-prison

http://www.businessinsider.com/rupe...icious-and-that-diamond-is-a-scapegoat-2012-7

even rupert is tweeting about it

I have been following this for a while and wondered why there was no discussion here!

The initial reports about manipulation of the rates in 2008 to hide the hemmorage was criminal and deserves serious jail time if allegations are proved true. Whats especially damning is the fact that this knowledge of the coming collapse was more widespread than most people were led to believe.

Imagine if intervention had happened back then? I am hoping the various lists of sources I listed prevents the usual nauseating source deflections.

*** I searched for a thread and saw something from a few months ago which was only about the 2008 allegations and not the more widespread stories were hearing about today.


I hope justice is swift with a heavy hammer.

 

[shabby]

I hope justice is swift with a heavy hammer.

It'll be a small fine like a slap on the wrist.
Btw what comes after trillion, is it finally kajillion?

 

[manimal]

It'll be a small fine like a slap on the wrist.
Btw what comes after trillion, is it finally kajillion?

Barclays just got handed biggest fine so far


http://www.bbc.co.uk/news/business-18759479



http://www.bloomberg.com/news/2012-...lling-as-boe-chief-race-hangs-in-balance.html

shiz just got real!!

 

[blankslate]

Barclays just got handed biggest fine so far


http://www.bbc.co.uk/news/business-18759479



http://www.bloomberg.com/news/2012-...lling-as-boe-chief-race-hangs-in-balance.html

shiz just got real!!

Screw the fines. Some people who in charge of these financial institutions need to serve jail time (decades, not just months) and be seen doing the perp walk.


Otherwise their mentality will be saying to themselves "oh well we just effed up and lost $9 billion of other people's money... Who cares if some of that money is retirement money that was invested in a 'safe investment'? We'll just pay a fine and try another gamble and maybe get lucky this time."


In the 80's after the S&L scandals people went to jail and until the Glass-Steagall act was repealed there wasn't much financial shenanigans at all. Now these dogs are crapping all over the financial landscape and no one is rubbing their noses in it....

 

[Thump553]

One commentator aptly compared manipulating LIBOR to get short term trading profits to the equivalent of melting the Artic ice cap for a drink of water. This has the potential of having the most widespread effects of ANY financial fraud to date yet, dwarfing such things as Madoff and Enron. If you have any sort of adjustable loan at all (including nearly all adjustable mortgages I have seen) chances are the adjusted rate is based upon a LIBOR index.

 

[manimal]

Screw the fines. Some people who in charge of these financial institutions need to serve jail time (decades, not just months) and be seen doing the perp walk.


Otherwise their mentality will be saying to themselves "oh well we just effed up and lost $9 billion of other people's money... Who cares if some of that money is retirement money that was invested in a 'safe investment'? We'll just pay a fine and try another gamble and maybe get lucky this time."


In the 80's after the S&L scandals people went to jail and until the Glass-Steagall act was repealed there wasn't much financial shenanigans at all. Now these dogs are crapping all over the financial landscape and no one is rubbing their noses in it....

I mentioned this in another thread but seeing board members being held accountable and getting jail time would seriously curtail wrongdoing.

One commentator aptly compared manipulating LIBOR to get short term trading profits to the equivalent of melting the Artic ice cap for a drink of water. This has the potential of having the most widespread effects of ANY financial fraud to date yet, dwarfing such things as Madoff and Enron. If you have any sort of adjustable loan at all (including nearly all adjustable mortgages I have seen) chances are the adjusted rate is based upon a LIBOR index.

Can you imagine the class action lawsuits:?

I just cant believe people arent more upset about this stuff. I remember reading Bloomberg and the WSJ in 2007 and seeing solid reporting about this issue then.

 

[blankslate]

I mentioned this in another thread but seeing board members being held accountable and getting jail time would seriously curtail wrongdoing.

I don't disagree.

 

[manimal]

I can see this becoming the blockbuster issue of the summer. This + the 8 billion dollar bet + price manipulation of natural gas = powder keg

 

[shabby]

Barclays just got handed biggest fine so far

What good is a fine if its smaller than the gains from the crime, its like getting fined $100 for stealing a truckload of ipads. Libor is tied to $800 trillion in loans and securities... trillion with a T.

 

[manimal]

What good is a fine if its smaller than the gains from the crime, its like getting fined $100 for stealing a truckload of ipads. Libor is tied to $800 trillion in loans and securities... trillion with a T.

I personally think Barclays got off easy. If this is the tip of the iceberg banks worldwide could be on the hook for billions. I think they should start going for jail time as well.


Surprised this isnt a bigger story today.

 

[Dari]

This is old news. But it's ongoing...

 

[silverpig]

The fine should be LARGER than the gain or it's no deterrent.

If they determine Barclays is $5B better off because of this, the fine should be $15B, and the people behind it should forfeit all their bonuses paid on profits they gained based on those actions, and they should all go to jail for a not-insignificant amount of time.

Otherwise we just have a "I made a bet, we gained $5B, I got $50M in bonuses off it, we got caught, the company had to pay $400M, oh well..." situation.

 

[manimal]

This is old news. But it's ongoing...

Its ongoing and had rather big developments today.

 

[UglyCasanova]

The scope this thing could potentially take is unnerving. Trillions of dollars in contracts are based on LIBOR. Now imagine various parties all around the globe wanting to sue to get out of contracts or for damages since the basis of the rates they were paying (or to be paid) was found to be faulty and fraudulent. One lawsuit victory could potentially open the floodgates.

I doubt that any government would let this happen though given the scope, and would more than likely tell the suing parties to suck it up and tough luck, all while inflicting tremendous punitive damages to the offending banks. Could this be the downfall of London as one of the global financial epicenters? Doom and gloom? Or will everybody just forget about it and go on like usual.

 

[manimal]

The scope this thing could potentially take is unnerving. Trillions of dollars in contracts are based on LIBOR. Now imagine various parties all around the globe wanting to sue to get out of contracts or for damages since the basis of the rates they were paying (or to be paid) was found to be faulty and fraudulent. One lawsuit victory could potentially open the floodgates.

I doubt that any government would let this happen though given the scope, and would more than likely tell the suing parties to suck it up and tough luck, all while inflicting tremendous punitive damages to the offending banks. Could this be the downfall of London as one of the global financial epicenters? Doom and gloom? Or will everybody just forget about it and go on like usual.

Could lead to regulation.

 

[UglyCasanova]

Could lead to regulation.

I think that's a given. No more self reporting of LIBOR at the very least.

 

[Abwx]

As usual the general public is left to think that the banksters did act
independently while it s almost sure that the monetary authority
was fully aware of the manipulation.

It just show how desesperate is the UK with his trillions £ of hidden debts...

 

[manimal]

The fine should be LARGER than the gain or it's no deterrent.

If they determine Barclays is $5B better off because of this, the fine should be $15B, and the people behind it should forfeit all their bonuses paid on profits they gained based on those actions, and they should all go to jail for a not-insignificant amount of time.

Otherwise we just have a "I made a bet, we gained $5B, I got $50M in bonuses off it, we got caught, the company had to pay $400M, oh well..." situation.

http://www.cftc.gov/index.htm

The CFTC just got funded to the tune of 400M dollars because of this ruling. The CFTC could get to add some teeth. I am trying to remember where I saw that.

I think that's a given. No more self reporting of LIBOR at the very least.

It could go alot deeper. Wonder how long the Knee-jerk parade takes to make this the signature issue. Heres hoping its sensible.

As usual the general public is left to think that the banksters did act
independently while it s almost sure that the monetary authority
was fully aware of the manipulation.

It just show how desesperate is the UK with his trillions £ of hidden debts...

RBS is being investigated as well.


http://thedianerehmshow.org/shows/2012-07-09/global-banking-scandal

 

[DCal430]

Does this affect the USD LIBOR rates. Also is it just overnight LIBOR, what about 1 to 6 month LIBOR?

 

[Dari]

Does this affect the USD LIBOR rates. Also is it just overnight LIBOR, what about 1 to 6 month LIBOR?

All. Also EURIBOR, TIBOR, etc...

 

[DCal430]

Hmm where I work we have around 4 billion in libor interest rate swaps. Wonder if we plan to do anything with this news. I have been on vacation, so don't know much of what is going on at work

 

[Exterous]

Screw the fines. Some people who in charge of these financial institutions need to serve jail time (decades, not just months) and be seen doing the perp walk.

Otherwise their mentality will be saying to themselves "oh well we just effed up and lost $9 billion of other people's money... Who cares if some of that money is retirement money that was invested in a 'safe investment'? We'll just pay a fine and try another gamble and maybe get lucky this time."

Seriously - everyone involved needs serious jail time. And while the company pays the fine I'll bet the employees who made and benefited from the decision will keep most of their gains. At most I would expect one or two fall guys but the rest will do just fine with their wealth.

What good is a fine if its smaller than the gains from the crime, its like getting fined $100 for stealing a truckload of ipads. Libor is tied to $800 trillion in loans and securities... trillion with a T.

Yeah - I got excited when he posted his commentary on the fine thinking it would be more than a slap on the wrist - but it doesn't fit the scale of issue.

The fine should be LARGER than the gain or it's no deterrent.

If they determine Barclays is $5B better off because of this, the fine should be $15B, and the people behind it should forfeit all their bonuses paid on profits they gained based on those actions, and they should all go to jail for a not-insignificant amount of time.

Given the potential scope of impact I don't think they would do this right now. They will probably tread very cautiously as to not do anything that might upset the economy (Not saying thats right or wrong, just thats what I expect to happen)

 

[LegendKiller]

There's a saying...there are no bad bonds, just bad prices. However, in 2008, there were no good prices because nobody wanted to lend to each other, I saw it happen and it wasn't some hidden thing, everybody knew it and that's why the Fed, ECB and BOE had to step in with temp liquidity facilities.

The only real losers in this situation are people who were investors who didn't get their full spread off of LIBOR and people who bought interest rate swaps (or FX) indexed off of LIBOR. People who funded loans with LIBOR were mostly benefitted along with purchasers of swaps.

 

[manimal]

There's a saying...there are no bad bonds, just bad prices. However, in 2008, there were no good prices because nobody wanted to lend to each other, I saw it happen and it wasn't some hidden thing, everybody knew it and that's why the Fed, ECB and BOE had to step in with temp liquidity facilities.

The only real losers in this situation are people who were investors who didn't get their full spread off of LIBOR and people who bought interest rate swaps (or FX) indexed off of LIBOR. People who funded loans with LIBOR were mostly benefitted along with purchasers of swaps.

So fraud is ok as long as everybody does it and few people get hurt?

 

[Atreus21]

The fine should be LARGER than the gain or it's no deterrent.

If they determine Barclays is $5B better off because of this, the fine should be $15B, and the people behind it should forfeit all their bonuses paid on profits they gained based on those actions, and they should all go to jail for a not-insignificant amount of time.

Otherwise we just have a "I made a bet, we gained $5B, I got $50M in bonuses off it, we got caught, the company had to pay $400M, oh well..." situation.

I'd say a fine is no deterrent at all unless it's sufficient to bankrupt them, and even then I'm not sure. They need jail time, and their business needs to go out of business.