My Two Cents on LIBOR-GATE

So much has been written on LIBOR-GATE that I have chosen to refrain from the subject until now.  It is a generally confusing topic for many not in the financial industry (and many that are) so I want to cut right into the heart of the matter.  First of all, in the CFTC’s very own press release about the scandal they wrote:

“The American public and our markets rely upon the integrity of benchmark interest rates like LIBOR and Euribor because they form the basis for hundreds of trillions of dollars of transactions and affect nearly every corner of the global economy,” said David Meister, the CFTC’s Director of Enforcement.

So even the layperson can understand these are the most important interest rates in the world and are used to price hundreds of trillions in ponzi (and legitimate) products.  The key thing however is that the bankster crooks are going to try to spin this as if they were only doing it during the height of the crisis and were working diligently with the Central Bank cabal to “save the financial system, planet earth and potentially the solar system as a whole.”  The mainstream media is mainly reporting this as a financial crisis phenomena.  This is patently untrue.

In fact, as we see from the UK’s Financial Service Authority (FSA) in this Final Notice to Barclays, the bank derivatives traders were in many cases instructing others where to price LIBOR in order to make their positions profitable.  See here:

On numerous occasions between January 2005 and June 2009, Barclays’ Derivatives Traders made requests to its Submitters for submissions based on their trading positions.  These included requests made on behalf of derivatives traders at other banks.  The Derivatives Traders were motivated by profit and sought to benefit Barclays’ trading positions.  The aim of these requests was to influence the final benchmark LIBOR and EURIBOR rates published by the BBA and EBF.

Notice the year 2005.  Prisons were invented for people like this.  Let’s stop playing games, lock these criminals up and claw back every dollar they ever made.

For the full FSA Notice click here.

2 Comments

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  1. We haven’t always agreed Michael, but on this one I’m 100 % in agreement. The activities of these “casino” bankers is, without doubt, criminal. However, here in the UK we have several problems. Firstly, there is no political will to prosecute ( and we all know the reasons for that): and secondly our Serious Fraud Squad ( and the Crime Prosecution Service) are woefully inadequate when it comes to complex financial matters. To the average Joe here, it appears that the old London Crime kings have simply been replaced by the financial “Master Class”. However the situation is much more insidious as our Law Enforcement Agencies are ill equipped to deal with this situation.

  2. I am positive that it would be possible for a CEO of a major bank to walk up and shoot somebody in the head, walk away, and pay a small fine. How far can these guys go with out any serious consequences?

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