{"id":131698,"date":"2012-09-02T11:36:16","date_gmt":"2012-09-02T15:36:16","guid":{"rendered":"http:\/\/www.prosebeforehos.com\/?p=131698"},"modified":"2012-12-26T16:03:43","modified_gmt":"2012-12-26T21:03:43","slug":"libor-crime-century","status":"publish","type":"post","link":"https:\/\/www.prosebeforehos.com\/article-of-the-day\/09\/02\/libor-crime-century\/","title":{"rendered":"Why LIBOR Is The Crime Of The Century"},"content":{"rendered":"

The Article:<\/strong> Libor: The Crime of the Century<\/a> by Robert Scheer in the Nation.<\/p>\n

The Text:<\/strong> Forget Bernie Madoff and Enron\u2019s Ken Lay\u2014they 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.<\/p>\n

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\u2014short for London interbank offered rate\u2014has resulted in a huge fine for Barclays Bank and threatens to ensnare some of the world\u2019s top financers. It reveals that behind the world\u2019s 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.<\/p>\n

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.<\/p>\n

<\/p>\n

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.<\/p>\n

\u201cStudy Casts Doubt on Key Rate\u201d was the headline on the May 29, 2008, investigative report, which concluded: \u201cMajor banks are contributing to the erratic behavior of a crucial global lending benchmark, a Wall Street Journal analysis shows.\u201d Even then, according to the report, it was known that the Libor rate was being manipulated \u201cto act as if the banking system was doing better than it was at critical junctures in the financial crisis.\u201d<\/p>\n

Fast-forward four years to Diamond\u2019s testimony before Parliament this week in which the CEO claimed his recent discovery of a pattern of interest manipulation by Barclays had made him \u201cphysically sick.\u201d Who was to blame? According to the executive, subordinates acting behind his back.<\/p>\n

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 \u201cI can\u2019t 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.\u201d<\/p>\n

He couldn\u2019t deny widespread chicanery within his bank because, as in the collapse of Enron a decade ago, investigators had uncovered an e-mail record of market manipulation so glaring that if the top executives were unaware, it was because they didn\u2019t want to know.<\/p>\n

As the New York Times editorialized: \u201cThe evidence, cited by the Justice Department\u2014which Barclays agreed is \u2018true and accurate\u2019\u2014is damning. \u2018Always happy to help,\u2019 one employee wrote in an email after being asked to submit false information. \u2018If you know how to keep a secret, I\u2019ll bring you in on it,\u2019 wrote a Barclays trader to a trader at another bank, referring to their strategies for mutual gain. If that\u2019s not conspiracy and price-fixing, what is?\u201d<\/p>\n

The US 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. \u201cSuch 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,\u201d the Times editorial said.<\/p>\n

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.<\/p>\n

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.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Article: Libor: The Crime of the Century by Robert Scheer in the Nation. The Text: Forget Bernie Madoff and Enron\u2019s Ken Lay\u2014they 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 […]<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[259],"tags":[],"yoast_head":"\nWhy LIBOR Is The Crime Of The Century<\/title>\n<meta name=\"description\" content=\"Forget Bernie Madoff and Enron\u2019s Ken Lay\u2014they were mere amateurs in financial crime. 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