Libor Reported as Rigged in ’08 Proving 2012’s Revelation. Barclays Plc’s admission that it rigged the London interbank offered rate shows regulators, central bankers and politicians weren’t paying attention when everyone from Citigroup Inc. to the Bank for International Settlements indicated that the measure was being manipulated.
The BIS signaled in March 2008 that the benchmark was being misstated. A month later, analysts at Citigroup suggested the same. In May of that year, one of Barclays’s own strategists said the numbers reported by banks “were a lie.” Barclays’s acknowledgement that it submitted false rates during the height of the credit crisis cost Chief Executive Officer Robert Diamond and other top managers their jobs and cut the bank’s market value by about 4.4 billion pounds ($6.9 billion). In the U.K. and abroad, at least a dozen banks are being investigated for manipulating Libor. Deficient Oversight Fed Ignored Libor is derived from a survey of London banks conducted each day by Thomson Reuters Corp. Subprime Collapse BIS Report. LIBOR-Fix.
Satyajit Das: The LIBOR Fix – Part 1. Yves here. This post includes some details on the background of the Libor scandal that were new to me and I believe readers will find informative. By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk (2011). Jointly posted with roubini.com. Satyjit Das: The LIBOR Fix – Part II. By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk and Traders Guns and Money.
Jointly posted with roubini.com. Yes, Virginia, the Real Action in the Libor Scandal Was in the Derivatives. Wall Street Bank Investors in Dark on Libor Liability. Barclays Plc (BARC) investors, blindsided by the bank’s $451.4 million regulatory fine for trying to rig benchmark rates, saw the stock drop 16 percent a day later.
Other bank shareholders may be just as surprised. Barclays, like other lenders that help set key rates for $360 trillion in securities, has given investors scant guidance on the liability they face for alleged market manipulation. More than a dozen banks are being probed by U.S., Asian and European regulators for collusion in setting interbank lending rates. London Banker: Lies, Damn Lies and LIBOR. I've been hesitant to write about the LIBOR scandal because what I want to say goes so much further.
We now know that Barclays and other major global banks have been manipulating the calculation of LIBOR through the quotation data they provided to the British Bankers Association. What I suspect is that this is not a flaw but a feature of modern financial markets. And if it was happening in LIBOR for between 5 and 15 years, then the business model has been profitably replicated to many other quotation-based reference prices. Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and resources, and to the preservation of the long term wealth of investors and the economy as a whole.
If price discovery is compromised by manipulation, then we will all be gradually impoverished and the economy will be imbalanced and unstable. The LIBOR affair: Banksters. Another Domino Falls in the LIBOR Banking Scam: Royal Bank of Scotland. LIBOR Scandal: The Smoking Gun Showing The Authorities Knew. The Big Losers in the Libor Rate Manipulation. Orders Barclays to pay $200 Million Penalty for Attempted Manipulation of and False Reporting concerning LIBOR and Euribor Benchmark Interest Rates. Barclays Corrupts Libor and Maybe a Lot More. If Barclays Plc would lie about its borrowing costs, what else would it lie about?
Settlements between Banks & regulators. Scope for criminal prosecutions? Libor rigging - Banks involved. Mervyn King tells banks: you can't go on like this. Sir Mervyn King, the governor of the Bank of England, piled the pressure on the City on Friday when he said something had gone "very wrong" with Britain's banks that needed to be put right.
As Barclays and other high street banks became embroiled in a new mis-selling scandal, King launched his most scathing attack yet on the culture of banking in the five-year-long financial crisis. King refused to say Bob Diamond was a "fit and proper" person to run Barclays as the reputational damage from an interest rate-fixing fine led to another fall in the bank's shares. Let's end this rotten culture that only rewards rogues.
Investment banking is an organised scam masquerading as a business.
It is defined by endemic conflicts of interest, systemic amoral behaviour and extreme avarice. Many of its senior figures should be serving prison sentences or disgraced – and would have been if British regulators had been weaned off the doctrine of " light touch" regulation earlier and if the Serious Fraud Office's budget had not been emasculated by Mr Osborne.
It is a tax on wealth generation and an enemy of honest endeavour – the beast that is devouring British capitalism. Massive Furor in UK Over Libor Manipulation; Where’s the Outrage Here? In case it isn’t yet apparent to you, the unfolding scandal over manipulation of Libor and its Euro counterpart Euribor is a huge deal.
Even though at this point, only Barclays, the UK bank that was first to settle, is in the hot lights, at least 16 other major financial players, which means pretty much everybody, is implicated. Banker to the Bankers Knows the Numbers Are Lying. The Bank for International Settlements, which acts as a bank for the world’s central banks, should know fudged numbers when it sees them.
What may come as a surprise is how openly it has been discussing the problem of bogus balance sheets at large financial companies. “The financial sector needs to recognize losses and recapitalize,” the Basel, Switzerland-based institution said in its latest annual report, released this week. “As we have urged in previous reports, banks must adjust balance sheets to accurately reflect the value of assets.”
A Huge Break in the LIBOR Banking Investigation. After Barclays, other banks are in our sights over interest rates, warns FSA. The FSA's headquarters.
After imposing a record fine on Barclays, the regulator's investigations are continuing. Photograph: Sean Potter/Alamy The Financial Services Authority has warned the banking industry that the record-breaking £59.5m fine levied on Barclays for attempting to manipulate interest rates might not be the last as an international investigation into the activities of other banks is being continued. Tracey McDermott, acting director of enforcement and financial crime at the City regulator, said that a "number of other significant cross-border investigations in this area" were under way involving other banks. Libor Probe Expands to Bank Traders. Manipulation And Abuse Confirmed In $350 Trillion Market.
LIBOR manipulation? Done for you, Big Boy.