Libor scandal grows, implicates other banks, British government

The Libor scandal is huge, much larger than previous scandals, as it  is at the central of the financial system, involves multiple big banks and apparently at least one government too.

Local governments got screwed due to Libor manipulation

Greg Smith wrote that at Goldman Sachs, the gullible bureaucrats on the other side of these deals were called “muppets.”

There really seem to be no depths to which Goldman will not sink to insult their customers while screwing them. Our investment banks are parasites, taking much, giving nothing in return.

Ex rogue trader says Barclays traders should go to prison and that the supposed big fine is just the cost of doing business. Plus, many more banks were involved too including here in the States, no doubt.

Americablog has a useful explanation about what Libor is.

Simply put, Libor is an interest rate based on self-reported interest rates from big banks. Zillions of other rates and deal are pegged to Libor, including mortgages. So, if you can rig Libor, many other rates, swaps, and derivatives can be gamed too.

Whitehall implicated in Libor scandal. Emphasis added

On July 3, in preparation for Mr. Diamond’s July 4 appearance before Parliament, Barclays released documents on its website that implicate the Bank of England, the Financial Services Authority (FSA), and even Whitehall in the scandal.

It is almost impossible to overstate the seriousness of these events or the potential they have to destabilize the financial system.

It should come as no surprise that at least one government was involved in the Libor rigging, and that’s what makes this so serious.

And in related news, JPMorgan being investigated over power market manipulation.

JPM is refusing to turn over emails related to the investigation. Gosh, now why do you suppose they would be doing that? Bloomberg is generally quite good on investigative reporting like this but this article takes the odd view that poor ole JPM CEO Jamie Dimon faces a PR nightmare over this.

“He’s got a PR nightmare in front of him,” said Paul Miller, a former examiner for the Federal Reserve Bank of Philadelphia and analyst at FBR Capital Markets in Arlington, Virginia. “It’s another headline risk, which means more regulators, which means over-regulation, which will eventually hit their bottom line.”

That rigging energy markets might be illegal apparently is of no concern to Mr. Miller. Instead it’s all about how trying to regulate obviously rogue banks might be distressing to their bottom lines. I have a better idea. Break the banks up and criminally indict bankers by the thousands. Hell yes the banks need more regulation.