Barclays just the tip of the iceberg as banking braced for more scandals

[Ruby the Liberal]

Source: GuardianUK

A record £290m fine imposed on Barclays for attempting to manipulate the price of a crucial interest rate known as Libor – the London interbank offered rate – and its European equivalent Euribor – has raised the prospect that the entire market has been rigged since as long ago as 2005.

...

This has sparked speculation that the fine against Barclays – the biggest sanction ever announced by the FSA, whose portion of the fine was £59.5m – could prove to be one of the smallest when the investigations are completed. Deutsche Bank became the latest to see its name linked with Libor-fixing on Friday, when the German financial regulator, Bafin, was revealed to be investigating it. Shares in the German bank fell although it had already admitted that it had been subpoenaed by a number of authorities in Europe and the US earlier in the year.

...

The immediate political fallout of the Libor crisis is the creation of a cross-party committee, chaired by Tory MP Andrew Tyrie, which will look at the wider issue of the culture and practices in the banking sector during what George Osborne has called the "age of irresponsibility". There are still calls by Labour for a full-blown public inquiry, although efforts to push this through the Commons failed this week after a rowdy debate by MPs. The FSA would stress that it has worked with international regulatory bodies and has been co-ordinating with the Serious Fraud Office over the Libor affair.

More broadly, the coalition has attempted to change the entire way the City is regulated. The FSA will be shut next year, with banking regulation moving to a subsidiary of the Bank of England and consumer regulation being handled by a new body. The requirement of banks to ringfence their high street operations from investment banks is also intended to tackle systemic risk – although this does not need to be implemented until 2019.



Read more: http://www.guardian.co.uk/business/2012/jul/08/banking-scandals-barclays

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Money quote (if you are a late night comedian) from this piece: "More recently, bankers have realised there is an image problem."

No, really? Heh.

[DeSwiss]

1. K&R

Humpty Dumpty sat on a wall
Humpty Dumpty had a great fall
All the King's horses and all the King's men
Couldn't put Humpty together again

- You remember how they say a meteor killed all those other dinosaurs? This is like that......

[OnyxCollie]

2. K&R. nt

[Kablooie]

3. At least in the UK they use the law to correct corruption. Not so in the USA.

We just lock up a few minor toadys and then start whistling and look the other way.

[obxhead]

4. No they don't.

They may parade a few more around than we do, but overall the US and UK are completely complicit in the ongoing shenanigans.

[Kablooie]

5. They seemed to pester Murdoch a heck of a lot. He's not a banker though.

[obxhead]

14. While he still walks around with his $$$$$ essentially untouched.

Thanks for making my point.

[Nostradammit]

6. Is that what you would like us to do?

Start whistling and look the other way?

Your post reads like an exhortation to do just that.

I don't think people can afford to look the other way much longer, nor do I predict they will.

[truth2power]

11. That's not what the poster said at all. He was taking issue with the fact

(and it is a fact. Look at how the congress critters rolled out the red carpet for Jamie Dimon) that we prosecute a few minor players, then start whistling and look the other way.

As Chris Hedges says, "all the levers of power have been corrupted". And I do mean ALL.

[magical thyme]

7. Ooooh NOES!!!!!!!

The requirement of banks to ringfence their high street operations from investment banks is also intended to tackle systemic risk – although this does not need to be implemented until 2019.


Only 7 more years of fraud and highway robbery for the banksters!

[blkmusclmachine]

8. Go read about Operation Northwoods:

You won't think about 9/11 quite the same way ever again.

http://abcnews.go.com/US/story?id=92662&page=1

[truth2power]

12. Yes, and I think those put options on 9/11 were traced back to Deutsche Bank....

Funny how people ignore what's staring them in the face.

Never mind...nothing to see here.

[flobee1]

9. The fines are a drop in the bucket

They need to erase the profits that the cheating has given them. As long as they still show profit, even with the fines, the thievery will not stop. You can send people to jail, but until you take away their precious money, IT WILL KEEP HAPPENING!
Money is all these people care about, and they will sell their own grandmother to get more of it.
Take away ALL of their money-every last cent, and put them on low credit score for 7 years like the rest of the people they screwed. 7 years of cash only transactions will be more of a punishment for these crooks than 10 years behind bars!

[byeya]

10. (1) Natrionalize the large banks; (2) If not that, then at least use the Anti-Trust laws

already in the books to break them up.
Don't let the banks stall: Break them up first and ignore the RepubliKKKan judges who interfere. This is the USA we should be
trying to save and it's a national emergency.

[truth2power]

13. I'll say again what I said upthread. ALL the levers of power have been corrupted...

It would be criminals prosecuting criminals. Good luck with that.

[riderinthestorm]

15. "has raised the prospect that the entire market has been rigged since as long ago as 2005."

"age of irresponsibility"?? Really, that's what Mr. George Osbourne wants to call it??

I call it massive fraud, corruption, collusion and criminal behavior. Jail these fuckers.

[suffragette]

16. Add Canadian and Japanese investigations to the list plus interesting note on Deutsche Bank

Libor-rigging went on until 2010, claims Canadian watchdog

http://www.guardian.co.uk/business/2012/jul/08/libor-rigging-claims-canada
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.

An affidavit filed in Ontario's superior court by the criminal matters branch of Canada's competition bureau alleges that traders working for the British banks HSBC and RBS, as well as the broker Icap, conspired to fix rates relating to Japanese yen trades for personal gain. Traders from Deutsche Bank, JP Morgan and Citibank Canada are also said to have taken part. All contest the claims.

The competition bureau is being aided in its investigation by Swiss bank UBS, which has turned whistleblower and agreed to hand over key documents, emails and transcripts that are expected to shine new light on the nature of the alleged collusion between staff at the banks.

According to the affidavit, UBS has "provided the bureau with information that, during the material time, the participant banks, at times facilitated by the cash brokers, entered into agreements to submit artificially high or artificially low London interbank offered rate (Libor) submissions in order to impact the yen libor interest rates published by the British Bankers Association".


Deutsche Bank suspends two over Libor -report
http://in.reuters.com/article/2012/07/08/banking-libor-deutschebank-idINL6E8I812L20120708

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.

A spokesman for Deutsche Bank on Sunday declined to comment on the article, referring to its quarterly report, which said it has received subpoenas and requests for information from U.S. and European authorities in connection with setting interbank rates.

On Friday, people familiar with the matter told Reuters that Germany's markets regulator has launched a special probe into Deutsche Bank over suspected manipulation of interbank lending rates.

Investigators in the United States, Europe and Japan are examining more than a dozen big banks over suspected rigging of the London Interbank Offered Rate (Libor).


Hmmm, looks like Ackerman (the former CEO of Deutsche Bank) tried to settle (buy off) as many potential illegal and scandalous endeavors as he could before leaving but the LIBOR investigations shows there were even more that took place.

5/11/2012

Deutsche Bank Settles Lawsuit with the US

http://www.spiegel.de/international/business/deutsche-bank-reaches-settlement-with-us-justice-department-a-832642.html


With just a couple of weeks to go before the era of CEO Josef Ackermann comes to an end at Deutsche Bank, Germany's largest financial institution is cleaning house. On Thursday, the bank reached a $202 million (€156 million) agreement with the US Department of Justice to settle charges that Deutsche had engaged in fraud.

The deal puts an end to a civil lawsuit alleging that Deutsche Bank subsidiary MortgageIT breached federal housing regulations from 2007 to 2009. The subsidiary made hefty profits during that period, partially due to the resale of risky mortgages. The Thursday deal included an admission by Deutsche Bank that it was in a position to know about the regulation violations.

~~~

The government lawsuit argued that bad mortgages made by MortgageIT cost the Department of Housing and Urban Development some $386 million to cover insurance claims made by the Federal Housing Administration. The costs stem from some 1,400 housing loans made by MortgageIT that have defaulted. More may be on the way.

Deutsche Bank bought MortgageIT for $430 million in 2007, on the eve of the bursting of the US real estate bubble. The Department of Justice accused Deutsche Bank of knowing at the time of the risky and illegal practices engaged in by MortgageIT, practices which, US officials said, only became worse following Deutsche's takeover of the company. According to the Financial Times Deutschland, Ackermann once called the purchase of MortgageIT the "biggest mistake of my time as CEO."


Many of the same banks are currently under investigation for energy price manipulation as well:

http://www.democraticunderground.com/1002901524

[midnight]

17. This tip of the iceberg issue is the problem and can no longer be payed for by the working class....