Jul 16, 2012
For the last few weeks, the world’s leading banks have been at the center of a new scandal.
The scandal broke when the Wall Street Journal covered a number of irregularities in the calculation of the LIBOR rate, that is, the rate at which banks charge each other. The investigation has resulted in a fine of 365 million dollars imposed on the British bank Barclay’s. Other banks will likely follow – including the two largest British banks, HSBC and RBS as well as CitiGroup in the U.S., the German Deutsche Bank, UBS in Switzerland and perhaps a number of others, including JPMorgan Chase and Bank of America.
Between 2005 and 2008, all these banks collectively put pressure to play with the LIBOR rate, providing false statements – and filling their own pockets as the result. Afterwards, even following the collapse of Lehman Brothers, a number of the banks like Barclay’s used distorted LIBOR rates to lead others to believe they were healthier than they really were, adding to the madness that reigned in the financial markets at the time. All this was known, at the time, to the New York Federal Reserve Bank – headed in 2008 by one Timothy Geithner – until he became Obama’s Secretary of the Treasury. He stood by and watched.
This new proof of the irresponsibility of these giant banks created another shock. So we can be sure there will be a new “investigation,” new reports, new committees set up to look into the matter – meanwhile, the banks go on their merry way, skimming off the top, and shooting craps with the wealth produced by society.