(Community Matters) I thought the Huffington Post headline was over-the-top sensationalist when referred to bank’s trading scandal as potentially their Enron moment . . . but the LIBOR business could do deeper, further and represent criminal activity – scary to imagine the reach
Playbook: SHOT: Matt Taibbi, writing Tuesday on his Rolling Stone “Taibblog” – “Why is Nobody Freaking Out About the LIBOR [London interbank offered rate] Banking Scandal ?: “The CEO of Barclays, Bob Diamond, has resigned in disgrace; his was the first of what will undoubtedly be many major banks to walk the regulatory plank for fixing the interbank exchange rate. … The furor is over revelations that Barclays … and other banks were monkeying with at least $10 trillion in loans … Americans … in recent years have been party to a number of revelations about strange and seemingly inappropriate contacts between senior regulatory officials and big bankers during the heat of the crisis…. [A] friend who works on Wall Street [said:] ‘It’s like finding out that the whole world is on quicksand.” http://bit.ly/L1VdIZ
–CHASER – WSJ 4-col. lead, “Rate Scandal Set to Spread: Former Barclays CEO Lambasted in Parliament as Other Banks Brace for Fallout,” by David Enrich and Sara Schaeffer Muñoz : “Barclays last week agreed to pay $453 million to settle U.S. and British authorities’ allegations that the British bank tried to manipulate the London interbank offered rate, or Libor, which is the benchmark for interest rates on trillions of dollars of loans to individuals and businesses around the world. … Libor, a measure of how much banks have to pay to borrow from each other, is drawn up daily following submissions from a group of 16 giant banks, which report their borrowing costs for loans of different maturities and in different currencies.
“Investigations of more than a dozen banks-by authorities on three continents-are starting to unearth evidence that some banks improperly sought to manipulate Libor. Regulators say that some banks, including Barclays, submitted artificially low readings during the early days of the financial crisis as part of an effort to mask the financial problems they were encountering. Analysts say the industry may have to shell out billions of dollars to settle the cases and other bank chiefs could find themselves in the cross hairs.”