July 7, 2012

IT'S THE ONLY WAY TO KEEP RATES THIS ARTIFICIALLY HIGH:

Rate rigging scandal: Just the start? (Irene Chapple, 7/05/12, CNN)

E-mails revealed as part of the rate fixing investigation showed traders were seeking beneficial rates for their trading positions.

During the credit crisis of 2007 and 2008, Barclays high Libor postings came under scrutiny and the bank, concerned about "unfounded negative perceptions," lowered its Libor submissions, according to Barclays notes to the Treasury Committee.

Regulators investigating Libor manipulation last month fined the bank more than $450 million. A report from the UK's Financial Services Authority concluded the issues were of the "utmost seriousness" owing to the prevalence of rates references throughout the markets.

But Barclays is unlikely to be the only bank facing financial penalties. Several additional banks are cited but not named in documents made public as part of Barclays settlement with the FSA.
Deutsche Bank, Royal Bank of Scotland, Credit Suisse, Citigroup, JPMorgan Chase and UBS are among the banks that are acknowledged as being investigated by regulators.


Libor, or the London Interbank Offered Rate, is the benchmark rate which is set every morning by banks posting the rate at which they are willing to borrow with the British Bankers' Association.
The BBA publishes Libor as a result of this, and the rate is then used to fix the borrowings of credit cards, mortgages, car leases and more.

Posted by at July 7, 2012 6:01 PM
  

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