The Largest Banking Scandal of the 21st Century
July 05, 2012
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The Largest Banking Scandal of the 21st Century ... at least thus far.
http://www.fool.com/investing/general/2012/07/04/the-largest-banking-scandal-of-the-21st-century.aspx
Excerpts:
"This is a global banking scandal, with potential victims equally widespread. Providing context for the $160 million penalty assessed to Barclays by the U.S. Department of Justice last week, Assistant Attorney General Lanny Breuer explained: "Because mortgages, student loans, financial derivatives, and other financial products rely on LIBOR and EURIBOR as reference rates, the manipulation of submissions used to calculate those rates can have significant negative effects on consumers and financial markets worldwide." Rolling Stone reporter Matt Taibbi reminds us that "almost every city and town in America has investment holdings tied to Libor.""
"Taibbi has been hot on the trail of another, completely separate bank scandal involving bid-rigging in municipal bonds, in which severa6l of the same banks have been implicated. By "secretly colluding to rig the public bids on municipal bonds," Taibbi explains, "the banks systematically stole from schools, hospitals, libraries, and nursing homes" all across the United States. Although the LIBOR and EURIBOR scandal is many orders of magnitude larger than the separate caper in the $3.7 trillion municipal-bond market here in the U.S., Taibbi is correct to point out that in the wake of both scandals, it's getting "harder and harder to make the case that the major banks do not routinely cooperate at the expense of the public when it serves their purposes to do so.""
"The proliferation of leveraged financial instruments representing a fractional-reserve approach to the world's supply of actual physical gold and silver paves the way for widespread manipulation with potentially dangerous consequences, and in my view, the sooner these issues are afforded the sort of transparency now befalling the LIBOR and EURIBOR rate-setters, the sooner folks will be empowered to ensure that banks are not colluding to pursue objectives that may ultimately run counter to the common public interest. At the very least, we now know for a fact that banks have indeed colluded to pursue their shared agenda, and I for one would now like to know whether any such collusion has occurred with respect to silver and gold."
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