I hope everyone is following this scandal.
It is yet another example of how corrupt the financial world is.
As if we need another example.
The scandal concerns the London interbank offered rate, which according to The Wall Street Journal is "the benchmark for interest rates on trillions of dollars of loans to individuals and businesses around the world" (Enrich & Munoz, A1)
I learned about the specifics of how the libor rate is set at Max Keiser. http://maxkeiser.com/2012/07/
15 big banks submit records of the inter-bank interest rates they pay and the libor rate is supposed to be averaged from these records of the 15 big banks.
However, the banks colluded in emails to submit falsified records in order to manipulate the libor rate, and to profit from that manipulation.
Barclays got caught red handed and agreed to pay $453 million "to settle US and British authorities' allegations that the British bank tried to manipulate the London interbank offered rate..." (Enrich & Munoz, A1).
Resignations have occurred at Barclays, but no charges have been filed against individuals.
Now Matt Taibbi has a rather interesting headline:
Taibbi: LIBOR Banking Scandal Deepens; Barclays Releases Damning Email, Implicates British Government. Rolling Stone July 4, 2012
Read more: http://www.rollingstone.com/politics/blogs/taibblog/libor-banking-scandal-deepens-barclays-releases-damning-email-implicates-british-government-20120704#ixzz1zoUkO4qU
"...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. 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).
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#ixzz1zoV306LE
I bet that all 15 banks were involved.
As Ellen Brown argues convincingly: "Government by the Banks, for the Banks: The ESM Coup D'Etat in Europe"
The Libor scandal is similar to the MF Global scandal in that it illustrates outright fraud and corruption.http://majiasblog.blogspot.com/2012/01/mf-globals-missing-12-billion-in.html
This is similar to the US government re-classifying Goldman Sachs so it could be bailed out by the Fed even though it was never part of the Federal Reserve System.http://majiasblog.blogspot.com/2009/10/goldman-sachs-rapes-america.html
Likewise, it is similar to the US Government continuing back-door bailouts to the banks, like Goldman, by paying 100% on AIG credit default swaps.
MORE FRAUD AND CORRUPTION, MORE LACK OF ACCOUNTABILITY.
Enrich, D., & Munoz, S. S. (2012, July 5). Rate Scandal Set to Spread. The Wall Street Journal, p. A1, A5.
Matt Taibi previously reported on how US banks used predatory interest rates against municipalities "Looting Main Street"–Matt Taibbi on How the Nation’s Biggest Banks Are Ripping Off American Cities with Predatory Deals" http://www.democracynow.org/2010/4/12/looting_main_street_matt_taibbi_on
April 8 2012 Despotism http://majiasblog.blogspot.com/2012/04/despotism.html
Sunday, January 8, 2012 Sociopathic Banks and Predatory Interest Rate Swaps http://majiasblog.blogspot.com/2012/01/sociopathic-banks-and-predatory.html
Saturday, March 10, 2012 Greek Credit Default Swaps ARE Going to Be Payed Out
Background on the Use of Derivatives in Causing the Financial Crisis