Libor, UK banks and the Tory connections

[ang]

Germany pushes Libor probe of Deutsche Bank -

German markets regulator BaFin is conducting a special probe of Deutsche Bank (DBKGn.DE) as part of a wider investigation into possible manipulation of the London Inter Bank Offered Rate (Libor), two people familiar with the matter said on Friday.

http://www.reuters.com/article/2012/...8650OH20120706

[barrym]

Of course, I presume the AIB, BoI, etc., were not involved in this, after all they are/were well regulated. I'd say the lads down in the docks were/are up to their Bollinger in it, grist to their mill.

The whole business of self regulation is and was a joke. OTOH how do you decide the LIBOR or €BOR if you don't ask and they tell porkies....

Did anyone see Newsnight last night? straight talking young fella from the London Indo, said it as it is to ex Goldman, ex cheating MP and a 'faith writer' who/what she, nice legs??

[Ephilant]

Diamond says he only found out last month about the bank(s) rigging the rates????

This is a 2008 headline from Bloomberg. 1 month or 4 years?

http://www.bloomberg.com/apps/news?p...d=aMSoLbYpbHWk

[DCon]

Germany pushes Libor probe of Deutsche Bank -



http://www.reuters.com/article/2012/...8650OH20120706

Some staff dismissed. DB, like Barclays, will probably pretend that it was a few corrupt traders and not systemic corruption

Two Deutsche Bank employees have been suspended after it used external auditors to examine whether staff were involved in manipulating interbank lending rates, German magazine Der Spiegel reported, citing no sources." Now what can possibly go wrong if the biggest bank in the world, with just shy of $3 trillion in "assets", which just happens to have a 1.68% Core Tier 1 ratio, is suddenly thrust smack in the middle of the scandal that the Economist just aptly named the finance industry's "tobacco moment"?

http://www.zerohedge.com/news/worlds...ieborgate-mess

[C. Flower]

Some staff dismissed. DB, like Barclays, will probably pretend that it was a few corrupt traders and not systemic corruption

http://www.zerohedge.com/news/worlds...ieborgate-mess

One million banking jobs in the UK. It's being taken seriously there.

It was never credible that rates could be fiddled in one place, while everyone else toed the line.

The Swiss Financial Market Supervisory Authority, known as Finma, contacted UBS AG (UBSN)and Credit Suisse Group AG (CSGN) regarding investigations into how the Libor interest rate was set, Der Sonntag reported.
Finma sent both banks detailed questions about the London interbank offered rate, the newspaper said, citing people close to the matter.Regulators in the U.S., Europe and Asia are investigating whether banks that help set key rates for $360 trillion of securities were involved in collusion. Barclays Plc was fined $451 million in the U.K. and U.S. on June 27 for submitting false Libor rates.

http://www.bloomberg.com/news/2012-0...ntag-says.html






Libor-rigging went on until 2010, claims Canadian watchdog

Investigation in Canada claims rate-fixing went on for a year after Barclays traders were found to have colluded in such methods

HSBC traders are allegedly implicated in rate-rigging, according to Canadian authorities, a claim the bank denies. Photograph: Luke Macgregor/Reuters

An investigation in Canada alleges that interest-rate rigging by staff working for British banks and financial institutions continued until at least June 2010, more than a year after Barclays' derivatives traders were found to have colluded in such practices.

[DCon]

Brussels talking tough and removing loopholes

Brussels is wading into the interest rate-rigging scandal rocking the City of London with a proposal to outlaw attempts to manipulate market indices across the EU and a fundamental review of the rules on how Libor is set.

Michel Barnier, the EU commissioner overseeing financial services, will amend reforms to EU market abuse rules so that potential “loopholes” are closed and criminal sanctions specifically cover tampering with indices such as Libor and Euribor.

http://www.ft.com/cms/s/0/fb4df786-c...#ixzz206mOXugE

[DCon]

Sky claiming to have emails between Diamond and UK Central Bank officials

Mark Kleinman ‏@MarkKleinmanSky

EXCLUSIVE: I've obtained emails between Bob Diamond, Paul Tucker and Jeremy Heywood ahead of TSC session this afternoon. Full story soon.

[ang]

Hmmmm

(Reuters) - The Federal Reserve Bank of New York may have known as early as August 2007 that the setting of global benchmark interest rates was flawed. Following an inquiry with British banking group Barclays Plc in the spring of 2008, it shared proposals for reform of the system with British authorities.

http://www.reuters.com/article/2012/...86907120120710

[Kev Bar]

"The finance industry's tobacco moment"

Nicely put by the Economist.

[Count Bobulescu]

The Fed did know in 2007.

The Federal Reserve Bank of New York said Tuesday it had received word as early as 2007 from the British bank Barclays about problems with the benchmark interest rate that underpins much of global lending.

The disclosure came as Washington policymakers began to increase their scrutiny of the role of regulators in the scandal surrounding the London interbank offered rate, or Libor.
Every day, major banks around the world submit their borrowing costs, which are then used to compute an interbank rate. Barclays was accused of concealing its borrowing costs — in an effort to drive up profits and send signals that the bank was healthier than it might have been.

http://www.washingtonpost.com/busine...c=nl_headlines

[DCon]

The lawsuits are starting Stateside.

The rest of the world will take notice

Lawsuits filed by municipalities, pension funds and hedge funds have been consolidated into related cases against major banks

As unemployment climbed and tax revenue fell, the city of Baltimore laid off employees and cut services in the midst of the financial crisis. Its leaders now say the city’s troubles were aggravated by bankers’ manipulation of a key interest rate linked to hundreds of millions of dollars the city had borrowed.

Baltimore has been leading a battle in Manhattan federal court against the banks that determine the interest rate, the London interbank offered rate, or Libor, which serves as a benchmark for global borrowing and stands at the center of the latest banking scandal. Now cities, states and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California’s public pension system, are looking at whether they suffered similar losses and are weighing legal action.

http://business-standard.com/india/n...andal-/480178/

[morticia]

Tbh, this reminds me of the whole Anglo golden circle borrowing to buy their own shares thing, where our fin reg allegedly turned a blind eye in the hopes the problem would Go Away.

Except this is on a Much Larger Scale....

[Count Bobulescu]

The lawsuits are starting Stateside.

The rest of the world will take notice

http://business-standard.com/india/n...andal-/480178/

There is speculation that CALPERS - California Public Employees Retirement System - the largest investor in the US stock markets may be about to file suit.

Dozens of states, cities and other government entities are exploring whether they lost money because of the alleged manipulation of a crucial benchmark used to set interest rates on hundreds of trillions of dollars worth of loans and investments.

The Baltimore suit has been consolidated with dozens of cases filed by others that say they suffered financial losses from the alleged scheme, including pension funds, municipalities and mutual funds.

“We have no sense of scale of loss,” said Michael Hausfeld, the lead attorney on the complaint. “At this point, it is too early to estimate. We know the volume of transactions is huge.”

Since the suit was consolidated in the spring, Hausfeld said he has heard from dozens of other government entities trying to determine whether they were hurt financially and should also bring legal action.

http://www.washingtonpost.com/busine...c=nl_headlines

[Count Bobulescu]

As I mentioned in my explainer last week, the London InterBank Offer Rate (or Libor), which Barclay’s and other banks stand accused of manipulating both before and during the financial crisis, is an average of the rates at which London banks lend to each other. In 2008, a competitor, the New York Funds Rate (NYFR) emerged, which did much the same thing with interbank lending in New York.

The main difference is that the rates from which NYFR is calculated are submitted anonymously. The idea is that the main reason for banks to artificially raise or lower their rate reports, especially during a nascent financial crisis is to signal their institution’s strength, which is impossible if the reports are anonymous. The Center for Geoeconomic Studies at the Council on Foreign Relations has thrown together a chart comparing the two throughout 2008. Most of the time, they’re extremely close to each other. Then they diverge at the exact point in time that banks are alleged to have manipulated Libor:

Interestingly, the economists Connan Snider of UCLA and Thomas Youle of the University of Minnesota released a paper two years ago, well before the scandal broke, using the NYFR-Libor discrepancy to argue that Libor was being manipulated to improve bank trading positions. Way to beat the Justice Department to it, guys.

http://www.washingtonpost.com/blogs/...t-its-a-chart/

http://www.washingtonpost.com/blogs/...libornyfr1.jpg

[DCon]

22 Billion..we will be talking about real money before long