LIBOR Bank Scandel, the foundations or banking corupted

[revelarts]

<object style="height: 390px; width: 640px"><param name="movie" value="http://www.youtube.com/v/0oV2mI0IYp8?version=3&feature=player_detailpage"><param name="allowFullScreen" value="true"><param name="allowScriptAccess" value="always"><embed src="http://www.youtube.com/v/0oV2mI0IYp8?version=3&feature=player_detailpage" type="application/x-shockwave-flash" allowfullscreen="true" allowScriptAccess="always" width="640" height="360"></object>

[fj1200]

Spitzer. :shakeshead:

[revelarts]

Spitzer. :shakeshead:

:shakeshead: ?
FJ shakeshead at spitzer but not at the banks and bankers who illegally conspired to fix the worlds interest rates for their on benefit and at the expense of the world economy.

What has Spitzer done by comparison FJ that would cause you to comment with a shake your head at him??

[revelarts]

The LIBOR manipulation story has exploded into a major scandal overseas. The CEO of Barclays, Bob Diamond, has resigned in disgrace (http://ftalphaville.ft.com/blog/2012/07/03/1068771/no-flowers/); his was the first of what will undoubtedly be many major banks to walk the regulatory plank for fixing the interbank exchange rate. The Labor party is demanding (http://www.huffingtonpost.co.uk/2012/06/28/barclays-should-face-criminal-investigation-says-ed-miliband_n_1633285.html) a sweeping criminal investigation. Mervyn King, Governor of the Bank of England, responded (http://www.guardian.co.uk/business/2012/jun/29/mervyn-king-banks) the way a real public official should (i.e. not like Ben Bernanke), blasting the banks:

"It is time to do something about the banking system…Many people in the banking industry are hardworking and feel badly let down by some of their colleagues and leaders. It goes to the culture and the structure of banks: the excessive compensation, the shoddy treatment of customers, the deceitful manipulation of a key interest rate, and today, news of yet another mis-selling scandal."

The furor is over revelations that Barclays, the Royal Bank of Scotland, and other banks were monkeying with at least $10 trillion in loans (The Wall Street Journal is calculating that that LIBOR affects $800 trillion worth of contracts).

The banks gamed LIBOR for two semi-overlapping reasons. As noted here last week (http://www.rollingstone.com/politics/blogs/taibblog/a-huge-break-in-the-libor-banking-investigation-20120628), there were instances of Barclays traders badgering the LIBOR submitters to "push down" rates in order to fatten their immediate bottom lines, depending on what they were trading or holding that day. They also apparently rigged LIBOR downward in order to produce a general appearance of better health, essentially tweaking their credit scores a few ticks upward.

Most intriguingly, or perhaps disturbingly, there were revelations last week that Bank of England deputy Governor Paul Tucker had a conversation (http://www.independent.co.uk/news/business/news/mps-to-question-bank-of-englands-deputy-governor-paul-tucker-7904459.html) with Diamond at the peak of the crisis in 2008. The conversation reportedly left Diamond, and subsequently his traders, with the impression that the bank had carte blanche to rig LIBOR downward in order to help allay spiraling public fears about the banks’ poor financial health.


Read more: http://www.rollingstone.com/politics/blogs/taibblog/why-is-nobody-freaking-out-about-the-libor-banking-scandal-20120703#ixzz20DI4f4Jd







This Libor-manipulation story grows crazier with each passing minute. We have officially disappeared now down the rabbit-hole of the international financial oligarchy.
Former Barclays CEO Bob Diamond is testifying before parliament in London today, and that's sure to bring some shocking moments. But there's already been one huge stunner (http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9373291/Barclays-libor-scandal-the-memo-that-shifts-the-spolight-onto-the-Bank.html). In advance of that testimony, Barclays released an email from October 29, 2008, written by Diamond to then-Chairman John Varley and COO Jerry del Messier (who also stepped down yesterday). The email from the CEO to the other two senior Barclays execs purports to detail the content of the conversation Diamond had with Bank of England deputy governor Paul Tucker that same day.
In the email, Diamond essentially tells the other two execs that he has been given permission by Tucker – encouraged, actually – to rig Libor rates downward. What’s even worse is that Diamond’s email suggests that Tucker was only following orders, i.e. that Tucker had received phone calls from "a number of senior figures within Whitehall" – that is, the British government – expressing concern about Barclays' high Libor rates. Tucker in this version of events was acting as a middleman for the British government, telling Diamond to fake his borrowing rates in order to preserve the appearance of financial stability, for the good of Queen and country as it were.



Read more: http://www.rollingstone.com/politics/blogs/taibblog/libor-banking-scandal-deepens-barclays-releases-damning-email-implicates-british-government-20120704#ixzz20DGq1GcZ

[revelarts]

Crime of the Century


Posted on Jul 6, 2012

<tbody>


AP/Mark Lennihan


Robert E. Diamond Jr., newly resigned as the CEO of Barclays.


</tbody>
By Robert Scheer (http://www.truthdig.com/robert_scheer/)
Forget Bernie Madoff and Enron’s Ken Lay—they were mere amateurs in financial crime. The current Libor interest rate scandal, involving hundreds of trillions in international derivatives trade, shows how the really big boys play. And these guys will most likely not do the time because their kind rewrites the law before committing the crime.


Modern international bankers form a class of thieves the likes of which the world has never before seen. Or, indeed, imagined. The scandal over Libor—short for London interbank offered rate—has resulted in a huge fine for Barclays Bank and threatens to ensnare some of the world’s top financers. It reveals that behind the world’s financial edifice lies a reeking cesspool of unprecedented corruption. The modern-day robber barons pillage with a destructive abandon totally unfettered by law or conscience and on a scale that is almost impossible to comprehend.

How to explain a $450 million settlement for one bank whose defense, in a plea bargain worked out with regulators in London and Washington, is that every institution in their elite financial circle was doing it? Not just Barclays but JPMorgan Chase, Citigroup and others are now being investigated on suspicion of manipulating the Libor rate, so critical to a $700 trillion derivatives market.


Caught as the proverbial deer in the headlights, Barclays Chairman Robert E. Diamond Jr. resigned this week and offered a plaintive defense to the British Parliament that he learned only recently that his bank was manipulating the index on which so large a part of international trade is based. That is plausible only if we assume he was paid $10 million a year to be deliberately ignorant. The Wall Street Journal had exposed this scandal fully four years ago but his bank continued to participate in it nonetheless.


“Study Casts Doubt on Key Rate” was the headline on the May 29, 2008, investigative report, which concluded: “Major banks are contributing to the erratic behavior of a crucial global lending benchmark, a Wall Street Journal analysis shows.” Even then, according to the report, it was known that the Libor rate was being manipulated “to act as if the banking system was doing better than it was at critical junctures in the financial crisis.”



Fast-forward four years to Diamond’s testimony before Parliament this week in which the CEO claimed his recent discovery of a pattern of interest manipulation by Barclays had made him “physically sick.” Who was to blame? According to the executive, subordinates acting behind his back.

The American-born banker, who has dual citizenship in the United States and Britain, is well versed in financial chicanery, having started by putting together derivatives packages at Credit Suisse First Boston back in 1996. He was compelled under parliamentary questioning Wednesday to admit that “I can’t sit here and say no one in the industry [knew] about the problems with Libor. There was an issue out there and it should have been dealt with more broadly.”
He couldn’t deny widespread chicanery within his bank because, as in the collapse of Enron a decade ago, investigators had uncovered an email record of market manipulation so glaring that if the top executives were unaware, it was because they didn’t want to know.


As The New York Times editorialized: “The evidence, cited by the Justice Department—which Barclays agreed is ‘true and accurate’—is damning. ‘Always happy to help,’ one employee wrote in an email after being asked to submit false information. ‘If you know how to keep a secret, I’ll bring you in on it,’ wrote a Barclays trader to a trader at another bank, referring to their strategies for mutual gain. If that’s not conspiracy and price-fixing, what is?”

The U.S. Justice Department made a deal with Barclays, and although it may prosecute some individuals in the scam, it agreed not to go after the bank itself. “Such an agreement makes sense only if that cooperation will allow prosecutors to nail other banks that have been involved in setting the rates, including potential cases against Citigroup, JPMorgan Chase and HSBC ... ,” the Times editorial said.

Both Citigroup and JPMorgan Chase were reported by The Wall Street Journal years ago to be suspected of rigging the Libor interest rate. The leaders of those banks, despite such media exposure, clearly remained confident enough to continue on their merry way.


The sad reality is that they will probably get away with it. The world of high finance is by design as obscure and opaque as the bankers and their political surrogates can make it, and even this most recent crack in their defense of deception will soon be made to go away.

"

http://www.truthdig.com/report/item/crime_of_the_century_20120706/

[revelarts]

http://www.usnews.com/news/blogs/rick-newman/2012/07/10/why-rigging-the-libor-interest-rate-is-a-big-rotten-deal



Another financial scandal means it's time for another impromptu primer on the technicalities of banking—and the astonishing chutzpah of bankers.

In this case, it appears that traders at Barclays and possibly other banks manipulated a key interest rate (http://www.usnews.com/news/blogs/rick-newman/2012/07/10/why-rigging-the-libor-interest-rate-is-a-big-rotten-deal#) between 2005 and 2009, to help enhance the profitability of their trades. For once, a top banking official has paid a price. Former Barclays CEO Bob Diamond has resigned and forfeited $31 million worth of bonuses in a settlement with the bank. It still isn't clear if Barclays broke any laws or if authorities will press charges.


But the evidence is mounting that traders, perhaps even with the tacit approval of regulators, were able to force down the London Interbank Offered Rate, otherwise known as Libor. Most consumers pay no attention to Libor, yet it affects millions of bank customers directly and indirectly. If bankers (http://www.usnews.com/news/blogs/rick-newman/2012/07/10/why-rigging-the-libor-interest-rate-is-a-big-rotten-deal#) were indeed able to manipulate the rate, it may be the most shocking example yet of their ability to exploit the basic machinery of the global financial system for their own gain.
Libor is a measure of the interest rates that global banks charge each other for short-term borrowing, without any guarantees against default, such as those offered in the United States by the FDIC. It's monitored by government agencies, such as the Federal Reserve and the U.K.'s Financial Services Authority, but it isn't regulated by anybody.
There are several Libor rates, reflecting the interest paid on short-term loans (http://www.usnews.com/news/blogs/rick-newman/2012/07/10/why-rigging-the-libor-interest-rate-is-a-big-rotten-deal#) ranging in duration from one day to one year. In effect, they represent an average of the real-world rates banks are actually paying to borrow. Ordinarily, Libor rates track other interest rates very closely, since there's usually little or no risk that banks lending to each other will default on their loans.


But during times of economic stress, such as the 2008 financial crisis, Libor is a first-line indicator of rising danger. From 2004 to the middle of 2008, for example, Libor rates for loans of various duration rose and fell in almost exact proportion to changes in the Federal Reserve's short-term interest rates. But starting in Sept. 2008, there was a sharp divergence. The Fed continued to cut its own rates, as the financial crisis intensified. But Libor rates skyrocketed. That indicated that banks were suddenly very nervous about getting back any money they lent out, even to other banks. Those concerns were validated when Lehman Brothers declared bankruptcy and other big banks, such as Citigroup, Bank of America, Royal Bank of Scotland and Lloyds, required government bailouts to remain solvent.
Currerncy traders watch Libor rates constantly and make bets when they feel the spread between Libor and other types of rates represents an opportunity. But Libor affects a lot of ordinary people who have never even heard of it. The interest rate on many loans, including some student and business loans and adjustable-rate mortgages (http://www.usnews.com/news/blogs/rick-newman/2012/07/10/why-rigging-the-libor-interest-rate-is-a-big-rotten-deal#), are pegged to Libor, the same way other loans are pegged to the U.S. prime rate. So if Libor rises, the interest rate paid on a lot of typical loans will rise, too.
[See why big banks deserve to get slammed (http://www.cbsnews.com/8301-503544_162-57345810-503544/poll-most-back-raising-taxes-on-millionaires/).]

Since Libor also represents the level of concern bankers feel about getting their money back, it also reflects the availability of credit. And sure enough, when Libor spiked in the fall of 2008, it signaled the start of a credit freeze that left many business owners and consumers unable to get loans. Some banks even called in lines of credit, a move that pushed some smaller businesses into bankruptcy. So Libor can be a very accurate indicator of tough times ahead.
One oddity of the Barclays scandal is that traders allegedly forced Libor down, not up, which means that anybody getting a loan pegged to Libor may have unwittingly benefited from the machinations of bankers. There's also some evidence that regulators at the Financial Services Authority, and maybe even the Bank of England, knew that traders were reporting lower Libor rates than they were actually paying or receiving in the market, which means that the reported rates followed by everybody else would have been understated. So more investigating needs to be done.
Whatever the case, it's alarming that bankers were able to deliberately influence Libor at all. Borrowers need to know that the interest rates they pay are determined by ordinary market forces, not by the whims of pinstriped sharpies.




http://www.huffingtonpost.com/2012/07/10/timothy-geithner-barclays-libor_n_1662389.html?1341951367

..As president of the New York Federal Reserve before and during the financial crisis, Treasury Secretary Timothy Geithner met repeatedly with Barclays officials, according to documents released by the bank and the New York Fed.

Though the subject of those discussions is unknown, they came at a time when Barclays was also talking to New York Fed officials about problems with an interest rate known as Libor, some five years before the bank agreed to pay $450 million (http://www.huffingtonpost.com/2012/06/27/barclays-libor-settlement-charges_n_1630644.html) to settle charges that it manipulated that interest rate.

The meetings raise questions about just how much Geithner, now the U.S. Treasury secretary, knew about the alleged manipulation of Libor, a critical interest rate that affects borrowing costs throughout the economy -- questions he'll have to answer at a Senate hearing later this month. They could also renew criticisms of Geithner as being too chummy with the banking sector he was charged with regulating in his role at the Fed...


maybe he knew maybe he didn't, he's got plenty of other performance issues though.


nice chart at
https://www.nytimes.com/interactive/2012/07/10/business/dealbook/behind-the-libor-scandal.html

[revelarts]

'Big five' bank customers vent anger by taking their money elsewhere July 9, 2012 Print Version (http://blacklistednews.com/?news_id=20450&print=1)
Source: UK Guardian (http://www.guardian.co.uk/money/2012/jul/07/big-five-bank-customers-anger)

Angry bank customers have been voting with their wallets and bombarding co-ops, building societies and credit unions with applications for current accounts over the past week, after the NatWest computer meltdown and the Barclays rate-rigging scandal.
Data compiled by the campaign group Move Your Money UK shows an explosion in requests to switch from large high street banks to smaller alternatives that consumers hope will take a more ethical approach. Charity Bank, which lends its savers' money to charities, has seen a 200% increase in depositors; the Ecology Bank has had a 266% jump in applications; and Triodos, a Bristol-based "sustainable bank", a 51% increase.

Credit unions, which are often small institutions investing people's savings in their local economy, have seen week-on-week increases of at least 20%, some of them up to 300%.

Read More @ Source (http://www.guardian.co.uk/money/2012/jul/07/big-five-bank-customers-anger)

[fj1200]

'Big five' bank customers vent anger by taking their money elsewhere

Of course all of that probably only means a less than 1% hit on the big boys.

[revelarts]

Of course all of that probably only means a less than 1% hit on the big boys.

yes, i hope more than 1 percent though.

be great if there was massive transfer,
this is like the second or 3rd wave of this ya know, happened after the bail outs as well.

[Kathianne]

http://www.usnews.com/news/blogs/rick-newman/2012/07/10/why-rigging-the-libor-interest-rate-is-a-big-rotten-deal



http://www.huffingtonpost.com/2012/07/10/timothy-geithner-barclays-libor_n_1662389.html?1341951367

maybe he knew maybe he didn't, he's got plenty of other performance issues though.


nice chart at
https://www.nytimes.com/interactive/2012/07/10/business/dealbook/behind-the-libor-scandal.html

Thought you might find this interesting:

http://www.washingtonpost.com/business/economy/geithner-drawn-into-libor-scandal/2012/07/12/gJQArDhbgW_story.html?wpisrc=al_comboNE


Geithner made recommendations on Libor in 2008, documents show By Jia Lynn Yang (http://www.washingtonpost.com/jia-lynn-yang/2011/03/03/ABnOHIQ_page.html), Published: July 12 While president of the Federal Reserve Bank of New York, Timothy F. Geithner pressed British regulators to reform the way a critical global benchmark called the London interbank offered rate, or Libor, is calculated, according to a June 1, 2008, e-mail obtained by The Washington Post.


Writing to the head of the Bank of England, among others, Geithner made six recommendations, which included eliminating incentives that could encourage banks to manipulate the rate and establishing a “credible reporting procedure.”


“We would welcome a chance to discuss these and would be grateful if you would give us some sense of what changes are possible,” Geithner wrote.


It’s unclear what other steps Geithner took and whether his efforts stopped any wrongdoing by banks. Last month, London-based Barclays, one of Europe’s largest banks, admitted that it schemed to manipulate Libor during the financial crisis — and its chief executive has asserted that regulators knew about its activities but didn’t do much to stop them. The scandal has led to the resignation of Barclays’s senior executives (http://www.washingtonpost.com/business/economy/barclays-executives-resign-in-interest-rate-scandal/2012/07/03/gJQATpDqLW_story.html).


With the Libor scandal threatening to migrate from London to Washington, pressure is growing on regulators and Geithner, who is now the Treasury secretary, to explain what they knew and when.


On Thursday, several key Democratic senators called on the Justice Department to hold accountable bankers and regulators who failed to “stop wrongdoing that they knew, or should have known, about.”


In an effort to address some of these questions, the New York Fed, which Geithner led from 2003 until he joined the Obama administration, is set to release a trove of documents Friday morning detailing its response to concerns raised as early as 2007 about Libor, which helps set the standard for $10 trillion worth of corporate bonds, credit cards, mortgages and other loans around the world.


Andrea Priest, a spokesperson for the New York Fed, said the documents to be released Friday “will show that the New York Fed took prompt action four years ago to highlight problems with Libor and press for reform.”
The New York Fed played a marginal role in driving the inquiry, according to a source familiar with the U.S. and British investigation. During years of investigation briefings on Libor, the New York Fed’s name rarely, if ever, came up, said the source, who spoke on the condition of anonymity because the investigation is ongoing.


In the byzantine world of banking regulation, the New York Fed is perhaps the most powerful player. Yet during the time that allegations about Libor were reported to the Fed, it was also in the middle of handling a metastasizing crisis in the financial sector.


The investment bank Bear Stearns collapsed just weeks before Geithner had a meeting on April 28, 2008, titled “Fixing LIBOR,” according to his schedule. Events continued to go downhill that summer and fall.]...

[Kathianne]

Will this get legs outside of financials?

<object id="cnbcplayer" classid="clsid<img src=" images="" smilies="" biggrin.png="" alt="" title="Big Grin" smilieid="3" class="inlineimg" border="0" height="380" width="400">27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" >


















<embed name="cnbcplayer" pluginspage="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000103138/code/cnbcplayershare" type="application/x-shockwave-flash" height="380" width="400">
</object>

[Dilloduck]

I think someone who isn't a criminal with the rest of them and owns a media outlet would have to do it.

So the odds are next to zero.

[Kathianne]

Hmmm:

http://finance.yahoo.com/blogs/daily-ticker/tim-geithner-aided-abetted-libor-crimes-jim-rickards-131709068.html


...The economy is the main event but the LIBOR scandal will be on the under-card when Fed Chairman Ben Bernanke testifies before Congress today and tomorrow. (See: Bernanke Ready to "Throw in the Towel on Inflation": Jim Rickards (http://finance.yahoo.com/blogs/daily-ticker/bernanke-ready-throw-towel-inflation-jim-rickards-153824686.html))


At issue is what the Fed, and other bank regulators, knew about manipulation of the key lending rate and whether they condoned banks giving low-ball estimates of LIBOR in order to make themselves look healthier during the crisis of 2008.


Bernanke is likely to face some inquires about this issue, but the U.S. regulator most questions are being asked about is Treasury Secretary Tim Geithner, who is set to testify about the matter before the House Financial Services committee next week.


In 2008, while President of the NY Fed, Geithner sent a memo to British regulators to raise concerns about potential manipulation of LIBOR, as has been widely reported and confirmed Friday by the NY Fed.


The question now is why Geithner didn't do more to follow up on that memo, considering the central role LIBOR plays in the financial markets. Literally hundreds of trillions of dollars of financial instruments -- including complex derivatives but also basic consumer loans are tied to LIBOR, technically the London Interbank Offered Rate.


The LIBOR scandal is "so big I don't think people have got their minds around it," says Jim Rickards, a partner at JAC Capital Advisors and author of Currency Wars: The Making of the Next Global (http://www.amazon.com/Currency-Wars-Making-Global-Portfolio/dp/1591844495). "This is the largest financial scandal I've seen in my career."


If $500 trillion of swaps are based on LIBOR and the rate was manipulated by 10 basis points over five years, that's $2.5 trillion of fraudulent transactions -- more than the combined capital of the nation's five largest banks, Rickards explains. "Congress may have to step in to limit the damages because it would threaten the banking system."


Led by the City of Baltimore, several U.S. municipalities have already filed lawsuits, seeking damages for interest rate swaps that were pegged to LIBOR, The NY Times reports (http://dealbook.nytimes.com/2012/07/10/libor-rate-rigging-scandal-sets-off-legal-fights-for-restitution/?ref=business). Analysts at Nomura Equity Research warn banks could be liable for "tens of billions" in related claims, while Morgan Stanley estimates the tab could be $22 billion.


Meanwhile, Rickards boldly claims Geithner could face "criminal liability" for failing to refer LIBOR manipulation to the Justice Department or FBI. "A fraud is a crime," he continues. "You can't witness a crime and not call the cops. Geithner might be guilty of aiding and abetting a crime."


Pressed on this, Rickards concedes it's highly unlikely Geithner will be charged with anything -- "the Justice Department will finesse it," he says. But that won't stop members of Congress from trying to score political points and put Geithner (and Bernanke) in the hot seat in the days and weeks ahead.

[revelarts]

I don't expect much from the congress or Githerner on this other than some faux outrage.
"I'm SHOCKED!! I'm Shocked, to find out that gambling going on here..."

<object style="height: 390px; width: 640px">


<embed src="http://www.youtube.com/v/SjbPi00k_ME?version=3&feature=player_detailpage" type="application/x-shockwave-flash" allowfullscreen="true" allowscriptaccess="always" height="360" width="640"></object>




but the courts might get some traction, this could finally get the some bankersters tossed in jail for a change.

[revelarts]

Tim Geithner's Libor Recommendations Came Straight From Banks, Documents Show



July 17, 2012

Source: Huffington Post

Treasury Secretary Timothy Geithner has so far escaped responsibility for the spreading Libor fixing scandal by releasing documents showing that when he became aware of the problem in 2008, as head of the Federal Reserve Bank of New York, he made recommendations to address it.
"The New York Fed analysis culminated in a set of recommendations to reform LIBOR, which was finalized in late May. On June 1, 2008, Mr. Geithner emailed Mervyn King, the Governor of the Bank of England, a report, entitled 'Recommendations for Enhancing the Credibility of LIBOR,'" a Fed statement released Friday reads. "As is clear from the work culminating in the report to Mr. King of the Bank of England, the New York Fed helped to identify problems related to LIBOR and press the relevant authorities in the UK to reform this London-based rate."
With that, Geithner earned a rash of headlines focused on his foresight, as well as criticism for the cozy relationship between regulators and bankers that had led to the controversy.
But the Fed, along with its statement, also released the staff work that led to the recommendations. Those documents reveal that the recommendations Geithner sent to London did not come from staff, but rather were proposed by major banks and more or less forwarded on verbatim.
The policy recommendations Geithner forwarded in an attachment on June 1 first appear in a staff memo dated May 20 that reads: "A variety of changes aimed at enhancing LIBOR's credibility has been proposed by market participants, and seem to be under consideration by the BBA. These proposed changes include, but are not limited to..."
A comparison between Geithner's recommendations and those put forward by "market participants" -- shorthand for banks -- makes it clear that Fed staff asked banks how to fix the problem, then presented those answers as their own. ...

http://www.huffingtonpost.com/2012/07/16/tim-geithner-libor_n_1674552.html

[revelarts]

<iframe src="http://current.com/bc/1732460362001?linkBaseURL=http%3A%2F%2Fcurrent.com %2Fshows%2Fviewpoint%2Fvideos%2Fthe-timing-couldnt-be-worse-why-the-libor-scandal-could-lead-to-tougher-wall-street-regulation%2F" width="480" height="270" frameborder="0" webkitAllowFullScreen allowFullScreen></iframe>

[revelarts]

http://www.bloomberg.com/news/2013-01-28/libor-lies-revealed-in-rigging-of-300-trillion-benchmark.html

Libor Lies Revealed in Rigging of $300 Trillion Benchmark

Where Libor is set each day affects what families pay on their mortgages, the interest on savings accounts and returns on corporate bonds. Now, banks are facing a reckoning, as prosecutors make arrests, regulators impose fines and lawyers around the world file lawsuits claiming the manipulation pushed homeowners into poverty and deprived brokerage firms of profits.
For years, traders at Deutsche Bank AG, UBS AG, Barclays, RBS and other banks colluded with colleagues responsible for setting the benchmark and their counterparts at other firms to rig the price of money, according to documents obtained by Bloomberg and interviews with two dozen current and former traders, lawyers and regulators. UBS traders went as far as offering bribes to brokers to persuade others to make favorable submissions on their behalf, regulatory filings show.
Members of the close-knit group of traders knew each other from working at the same firms or going on trips organized by interdealer brokers, which line up buyers and sellers of securities, to French ski resort Chamonix and the Monaco Grand Prix. The manipulation flourished for years, even after bank supervisors were made aware of the system’s flaws.
“We will never know the amounts of money involved, but it has to be the biggest financial fraud of all time,” says Adrian Blundell-Wignall, a special adviser to the secretary-general of the Organization for Economic Cooperation and Development in Paris. “Libor is the basis for calculating practically every derivative known to man.”



http://www.blacklistednews.com/Libor%3A_%E2%80%98We_will_never_know_the_amounts_o f_money_involved%2C_but_it_has_to_be_the_biggest_f inancial_fraud_of_all_time%E2%80%99/23926/0/38/38/Y/M.html


Every morning, from his desk by the bathroom at the far end of Royal Bank of Scotland Group Plc’s trading floor overlooking London’s Liverpool Street station, Paul White punched a series of numbers into his computer.
(http://www.bloomberg.com/photo/diamond-testifies-in-libor-probe-/285000.html)

Former Barclays CEO Robert Diamond gave evidence to the Treasury Select Committee in London on July 10, 2012. Diamond stepped down from his position after regulators fined the bank 290 million pounds for attempting to rig the benchmark interest rate. Photographer: Paul Thomas/Bloomberg


Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, started an investigation after listening to a tape of a conversation between traders and rate setters at Barclays. Photographer: Peter Foley/Bloomberg

(http://www.bloomberg.com/photo/london-lawyer-takes-on-libor-banks-/285008.html)

Stephen Rosen, an attorney at Collyer Bristow in London, represents a real estate company, three nursing homes and more than a dozen other firms that bought Libor-linked interest-rate swaps from banks. Photographer: Harry Borden/ Bloomberg Markets

(http://www.bloomberg.com/photo/libor-score-card-/285004.html)




White, who had joined RBS in 1984, was one of the employees responsible for the firm’s submissions for the London interbank offered rate, or Libor, the global benchmark for more than $300 trillion of contracts from mortgages and student loans to interest-rate swaps. Behind him sat Neil Danziger, a derivatives trader who had worked at the bank since 2002.
On the morning of March 27, 2008, Tan Chi Min, Danziger’s boss in Tokyo, told him to make sure the next day’s submission in yen would increase, Bloomberg Markets magazine will report in its March issue. “We need to bump it way up high, highest among all if possible,” Tan, who was known by colleagues as Jimmy, wrote in an instant message to Danziger, according to a transcript made public by a Singapore court and reported on by Bloomberg before being sealed by a judge at RBS’s request.

Danziger typically would have swiveled in his chair, tapped White on the shoulder and relayed the request to him, people who worked on the trading floor say. Instead, as White was away that day, Danziger input the rate himself. There were no rules at RBS and other banks prohibiting derivatives traders, who stood to benefit from where Libor was set, from submitting the rate -- a flaw exploited by some traders to boost their bonuses.

The next morning, RBS said it would have to pay 0.97 percent to borrow in yen for three months, up from 0.94 percent the previous day. The Edinburgh-based bank was the only one of 16 surveyed to raise its submission that day, inflating that day’s rate by one-fifth of a basis point, or 0.002 percent. On a $50 billion portfolio of interest-rate swaps, RBS could have gained as much as $250,000.
Events like those that took place on RBS’s trading floor, across the road from Bishopsgate police station and Dirty Dicks, a 267-year-old pub, are at the heart of what is emerging as the biggest and longest-running scandal in banking history. Even in an era of financial deception -- of firms peddling bad mortgages, hedge-fund managers trading on inside information and banks laundering money for drug cartels and terrorists -- the manipulation of Libor stands out for its breadth and audacity.
Details are only now revealing just how far-reaching the scam was.....

[revelarts]

UPDATE LIBOR!!



http://rt.com/uk/193872-london-banker-libor-guilty/





A senior London banker has become the first person to be prosecuted for fixing the London interbank offered rate (Libor), a scandal that resulted in billions worth of losses for savers as banks fraudulently boosted their profits.

The banker, who has not been named for legal reasons, faces up to 10 years in jail after being charged with fixing the inter-lending rate by the Serious Fraud Office (SFO).

The banker pleaded guilty to “conspiracy to defraud” by manipulating the rate at Southwark Crown Court on 3rd October.

“A senior banker from a leading British bank pleaded guilty at Southwark Crown Court on 3 October 2014 to conspiracy to defraud in connection with manipulating Libor,” the court said in a statement.

“This arises out of the Serious Fraud Office investigations into Libor fixing.”

The banker is the first person in Britain to be found guilty following the Libor scandal in 2012, in which the SFO discovered evidence of rigging the benchmark interest rate.

According to the SFO, between 2005 and 2008, traders working for several major banks including Barclays were asked to submit Libor positions that would put the bank in a favourable position, as well as other illegal activity such as colluding with other banks to manipulate the overall rate.

Other banks implicated in the scandal include the Royal Bank of Scotland (RBS), Deutsche Bank (DB), Credit Suisse (CS), JP Morgan (JPM) and Citigroup.

The Libor rate is used by banks to coordinate hundreds of trillions of pounds worth of loans and transactions in global currencies, as well as the trading of mortgages and derivatives.

The rate is also used to assess the health of a bank, as it is an indicator of how much one bank is willing to lend another, and how much it would charge for the loan.

However in 2012, the SFO and the Financial Services Authority (FSA) found that banks had been deliberately fixing the rate to paint a better image of their credit quality, and in so doing keep their profits artificially high.

The scandal was one of the biggest in global financial history, according to some economists.
"This dwarfs by orders of magnitude any financial scams in the history of markets," Andrew Lo, a professor of finance at the Massachusetts Institute of Technology (MIT) told CNN in 2012. ....


the headline for the story is, London banker pleads guilty to fixing Libor, faces up to 10 yrs in jail

Ok so the biggest financial crime in history and it gets a max of 10 yrs in jail?

Former Illinois Gov. Rod Blagojevich was sentenced to 14 (http://www.politico.com/news/stories/1211/69973.html#ixzz3Fh3Wj8FZ) years in prison in 2011 for trying to sell Barack Obama’s Senate seat and other corruption charges and was lectured by the judge for deeply harming the public trust.

So just FYI folks, you may as well do a crime for billions because it's nearly the same sentence if you do it for 7-11 cash.



Story also here...
http://online.wsj.com/articles/banker-pleads-guilty-in-uk-libor-case-1412675287?tesla=y&mod=WSJ_LatestHeadlines

[revelarts]

there's a lot to deal with here but one odd thing about the sentencing and trail info here hits me .

they're not releasing the name of the guy who pled guilty. so is that something in British courts? I mean if you're even accused of crime here it's all public record and cameras are following you home and you're mom's on TV crying.
But a player in biggest financial crime in history gets his name and pics withheld?!:eek:

[grannyhawkins]

Great story rev!!! I posted this on another forum a year or so ago but nobody understood the implications. I'm typing onna phone right now as my service is dead in the water and I can't handle it

[fj1200]

Great story rev!!! I posted this on another forum a year or so ago but nobody understood the implications. I'm typing onna phone right now as my service is dead in the water and I can't handle it

Implications? I think they're pretty nil IMO.

[grannyhawkins]

Implications? I think they're pretty nil IMO.

I guess the continued worldwide theft, by financial institutions and governments, of the middle class, don't mean a thang!!! Mortgages, student loans and our own municipalities, is unimportant. Nothin ta see here, just move along!!!

http://2.bp.blogspot.com/_UU-AGpaPuq4/TT7QlOjzrvI/AAAAAAAAAW8/tTDvBrnJhHM/s1600/Mr.+Potter+%2528greedy+banker%2529+pic.bmp

[fj1200]

I guess the continued worldwide theft, by financial institutions and governments, of the middle class, don't mean a thang!!! Mortgages, student loans and our own municipalities, is unimportant. Nothin ta see here, just move along!!!

Of course the house always wins, they've got a sweet deal with the Fed as the lender of last resort. But theft overstates it IMO, stealing a dollar from a billion people doesn't mean much to each individual. But then again ask rev, I'm a shill for the big banks. ;) Either that or I think we should look closer at the root causes and not claim everything to be at conspiracy level.