FDIC Sues 16 Big Banks For Rigging LIBOR Rates

NEW YORK (Reuters) - The Federal Deposit Insurance Corporation sued 16 of the world's largest banks on Friday, accusing them of collusively suppressing interest rates.

The lawsuit, filed in the federal district court in New York, was the latest to accuse financial institutions of conspiring to manipulate Libor, or the London Interbank Offered Rate.

The FDIC said the defendants' conduct caused substantial losses to 38 banks that the U.S. regulator had taken into receivership since 2008, including Washington Mutual Bank and IndyMac Bank.

Among the banks named as defendants include Bank of America Corp, Barclays PLC, Citigroup Inc, Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings PLC, JPMorgan Chase & Co, the Royal Bank of Scotland Group PLC and UBS AG.

The lawsuit also named as a defendant the British Banks' Association, the U.K. trade organization which during the period at issue administered Libor.

Original Article
Source: huffingtonpost.com/
Author: Reuters

Barclays Libor Report Shows Too Big To Fail Is Also Too Big To Manage

A post mortem on how Barclays Capital ended up in its Libor mess is the latest proof that banks that are too big to fail are also too big to manage.

The report, by the lawyer Anthony Salz, focuses on how exorbitant pay at Barclays made bankers behave badly. Understandably, much of the press accounts focus on that angle, too. It's an important part of the story, for sure.

Judge Dismisses Most Claims In Libor Lawsuits, Ruling In Favor Of Big Banks

NEW YORK (Reuters) - Judge on Friday dismissed a "substantial portion" of claims facing a number of banks in a barrage of lawsuits accusing them of interest-rate rigging.

U.S. District Judge Naomi Reice Buchwald in Manhattan ruled for the banks, which include Bank of America Corp , JPMorgan Chase & Co and others of allegedly manipulating the London Interbank Offered Rate, commonly known as Libor.

The judge granted the banks' motion to dismiss the plaintiffs' federal antitrust claims and partially dismissed their claims of commodities manipulation. She also dismissed racketeering and state-law claims.

Original Article
Source: huffingtonpost.com
Author: Reuters

Deutsche Bank Made Huge Profit On Libor During Financial Crisis: Report

Back in 2008, when financial markets were chaotic and unpredictable, at least one large bank managed to turn a hefty profit with finely-tuned bets on an interest rate that was being manipulated almost constantly by large banks.

The Wall Street Journal reports that Deutsche Bank turned a neat profit of $654 million betting on small changes in the benchmark lending rate known as Libor in 2008, the year when global markets were at their absolute craziest. The bets were an "extremely large risk" even for Deutsche Bank, one of the biggest banks in Europe, one analyst tells the WSJ.

Libor Manipulation Cost Fannie Mae, Freddie Mac $3 Billion, Watchdog Says

Libor manipulation cost Fannie Mae and Freddie Mac more than $3 billion, according to an estimate by a government watchdog, who recommends the government-owned mortgage giants sue the big banks.

That estimate and legal advice were made in a private report by Steve Linick, the inspector general for the Federal Housing Finance Agency, the regulator for Fannie and Freddie, which were taken over by the U.S. government during the financial crisis. The Wall Street Journal first reported the watchdog's analysis on Wednesday.

UBS Admits Fraud, Agrees To Pay $1.5 Billion To Settle Libor Rigging Charges

ZURICH Dec 19 (Reuters) - Swiss bank UBS was hit with a $1.5 billion bill and admitted to fraud on Wednesday in order to settle charges of manipulating global benchmark interest rates.

The penalty agreed with U.S., UK and Swiss regulators is more than three times the $450 million fine levied on Britain's Barclays in June for rigging the Libor benchmark rate used to price financial contracts around the globe.

Matt Taibbi on the Unfolding Libor Scandal and What Sen. DeMint’s Departure Means for Fractured GOP

News of HSBC’s $1.9 billion fine comes as three low-level traders were arrested in London as part of an international investigation into 16 international banks accused of rigging a key global interest rate used in contracts worth trillions of dollars. The London Interbank Offered Rate, known as Libor, is the average interest rate at which banks can borrow from each other. We’re joined by Matt Taibbi, Contributing Editor for Rolling Stone magazine and author of "Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History." Taibbi also comments on the departure of Republican senator and Tea Party-favorite Jim DeMint of South Carolina.

Video
Source: Democracy Now!
Author: --

Libor Manipulation Scandal: Britain's Serious Fraud Office Arrests 3 In Interest Rate Probe

LONDON, Dec 11 (Reuters) - Britain's Serious Fraud Office (SFO) and London police have made the first arrests as part of a global investigation into the manipulation of interbank lending rates, a scandal that has rocked the banking industry.

The SFO said on Tuesday three British men, aged 33, 41 and 47, were taken to a London police station for interviews in the early morning after three properties were searched.

RBC, SocGen said to be among banks subpoenaed in Libor probe

Royal Bank of Canada, Société Géneralé SA and Bank of America Corp. are among nine additional banks that were subpoenaed in New York and Connecticut’s probe of alleged manipulation of Libor, a person familiar with the matter said Thursday.

The subpoenas, issued by New York Attorney General Eric Schneiderman starting in August, bring to 16 the total number of banks that have been subpoenaed in the states’ investigation, said the person, who asked not to be named because there wasn’t authorization to speak publicly.

Schneiderman and Connecticut Attorney General George Jepsen are jointly investigating claims that banks rigged the London interbank offered rate, or Libor, a worldwide benchmark for borrowing. The same person said in August that seven banks were subpoenaed in their investigation, including JPMorgan Chase & Co. and Barclays Plc.

Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment on the subpoenas. Stephanie Lu, a spokeswoman for Royal Bank of Canada, and Société Géneralé spokesman Jim Galvin didn’t immediately respond to e-mails seeking comment.

Original Article
Source: the star
Author:  Bloomberg 

Interest Rate Manipulation Extends Far Beyond Libor, Secret Survey Reveals

Interest rates all over the world are mostly made up.

That's the verdict of a new study by the International Organization of Securities Commissions, a copy of which was obtained by Bloomberg. It found that more than half of the benchmark lending rates in the U.S., Europe and Asia are "calculated by methodologies that were unclear, not transparent and only rarely subject to specific regulatory standards or obligations." Less than half of all benchmark lending rates, in contrast, were based on actual market transactions.

The Citizen Kane Era Returns

Last month, the Denver Business Journal showed that international banking scandals can be a major focus of local reporting. In its article “LIBOR scandal may cost Denver schools money,” the low-circulation trade magazine documented how the interest-rate scandal, which originated in the United Kingdom, could end up bilking Colorado taxpayers of millions thanks to a refinancing plan for schools orchestrated in 2008 by then superintendent Michael Bennet. His controversial scheme placed Denver’s public-school-district pension fund in the hands of the finance industry, which later underwrote his U.S. Senate campaign.

In a state facing recurring budget deficits and underfunded schools, such losses are a blockbuster story—just as they are in every municipality whose finances have been destroyed by conniving politicians. But to date, most Coloradans haven’t heard about the local implications of the LIBOR scandal or the problems with the school-refinancing scheme. That’s because their media market’s dominant broadsheet, the Denver Post, has chosen not to invest serious resources in reporting on them.

TV News Is Not Aware Of This Libor Scandal Of Which You Speak

Maybe instead of asking why Americans don't care about the Libor scandal, we should be asking whether they've even heard of it.

The scandal that has been not-crazily called the biggest financial scandal in history has gotten all of zero minutes' air time on the ABC and NBC nightly news broadcasts and only a little more time than that on CBS and the major cable news channels, according to a report by the progressive media watchdog Media Matters.

Barclays and the Limits of Financial Reform

Hardly had the boyish visage of JPMorgan Chase’s Jamie Dimon quit CNN screens than it was succeeded by that of Bob Diamond, former chief executive of Barclays, accused of masterminding the greatest financial scandal in the history of Britain. Columnists shook with rage at the “reeking cesspool” being disclosed—disclosed, mind you, four long years after the Wall Street Journal broke the story that the Libor was being fixed. Libor, which stands for “London interbank offered rate,” is supposed to be based on the average rate of interest banks charge to borrow from one another. The rate is set every morning by a panel of banks. Each bank “submits” the rates at which it believes it can borrow from the collective money pool, from overnight to twelve months.

Banking suffers another blow as scandals pile up

The sequel to the financial crisis is under way, and there are no prizes for guessing who has been cast in the role of villain.

It has been a very bad few weeks for banking. The walk of shame has included employees tarred as rate-manipulators (Barclays PLC), money launderers (HSBC Holdings PLC), rogue traders (JPMorgan Chase & Co.), and outright fraudsters (Peregrine Financial Group Inc.).

Elizabeth Warren: 'Libor Fraud Exposes Rot At The Core Of The Financial System'

Elizabeth Warren jumped into a growing chorus decrying the massive Libor manipulation on Thursday with a scathing editorial in the Washington Post.

"The Libor scandal is more than just the latest financial deception to come to light. It exposes a fraud that runs to the heart of our financial system," writes Warren, a long-time Wall Street critic who is running for the U.S. Senate in Massachusetts.

"The Libor fraud exposes rot at the core of the financial system," Warren writes.

Matt Taibbi: Libor Rate-Fixing Scandal "Biggest Insider Trading You Could Ever Imagine"

Rolling Stone’s Matt Taibbi joins us to discuss the pattern of systemic corruption by 16 banks accused of rigging a key global interest rate used in contracts worth trillions of dollars. The London Interbank Offered Rate, known as Libor, is the average interest rate at which banks can borrow from each other. Some analysts say it defines the cost of money. Barclays was recently fined $453 million for rigging Libor, and a number of other banks are under investigation. "Ordinary people actually suffered when Libor was manipulated downward, mainly because local governments tended to lose money," Taibbi says. "Even the tiniest manipulation downward, when you’re talking about a thing of this scale, would result in tens of trillions of dollars of losses. ... The banks weren’t doing this just to make themselves look healthier, they were also doing this just to make money. They were trading against this information in what essentially was the biggest kind of insider trading you could possibly imagine." Taibbi is author of the book "Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History."

Video
Source: Democracy Now!
Author: --

Mark Carney ‘deeply troubled’ over Libor, says Financial Stability Board can help

Bank of Canada Governor Mark Carney says the facts that have emerged out of the Libor scandal are “deeply troubling.”

“It’s not just the structure of the index, which U.S. Federal Reserve Chairman Ben Bernanke has rightly described as flawed, but it’s the active, conscious, repeated manipulation of that index,” Carney told a press conference in Ottawa Wednesday.

Will Britain's Libor Scandal Finally Force Real Bank Reform in the US?

London—As lies go, none is greater than the one that suggests banks are capable of “self-regulation.”

Given authority over their own affairs, through fantasies such as “self-reporting,” CEOs, CFOs and COOs who travel in limousines, wear very expensive suits and give to all the right charities will do what comes naturally to them: lie.

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

WASHINGTON -- 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."

Competition bureau probes Canadian link to bank scandal

Canada's Competition Bureau continues to probe a mushrooming international scandal that has already ensnared a venerable British bank and forced the resignation of its chief executive.

Documents filed in an Ontario court suggest the bureau is investigating a possible Canadian link to the scandal that's rocking the world of global banking: financial skullduggery involving the manipulation of a key international interest rate known as the LIBOR rate.