“It’s hard to imagine a bigger case than LIBOR.”
~Anonymous Government Regulator 

The LIBOR interest rate fixing scandal could only have happened with at least 12 banks working together in clear violation of American anti-trust and other international laws to manipulate the price of interest rates that affect nearly everything in our capitalist economies.  This has the effect of essentially pilfering pennies at a time from hundreds of millions, even billions of people taking out unknown billions of dollars directly from the pockets of the middle class and placing it directly in the hands of very wealthy bankers.  This is CRIMINAL.  It’s time for people to stop responding with civility and to start demanding real consequences.

The LIBOR rate is tied to $350 TRILLION in financial derivatives contracts.

These banks have bribed politicians and participated in legalized corruption for years.  So when banks conspire together in clear violation of anti-trust laws effectively stealing from every American … it’s far past time for some sort of fine ….it’s time for real consequences.  Sure – today … Texas executed a man with brain damage whose jury never learned of it due to not being able to afford a reasonably decent defense (source) … but I do not recall any hedge fund managers ever getting the death penalty for bilking billions from citizens.  Well – they should.  We’ll give someone 20 years for stealing $100 from a bank so they can pay their electricity bill but when a group of wealthy bankers conspire together to fuck you … they get a fine and they laugh about it afterward.

“In fact – it can’t be even 4 banks or even 5 banks.  End the end it’s probably going to come out that it’s going to be all of them that were involved in this.  And that’s what’s critical for people to understand that this is a cartel style of corruption … it’s not just one in Barclay’s.”
~Matt Taibbi

Well – I’m not good with that.  I’m not ok with that.  That’s not a reasonable end to the story.  I’m advocating for a much more severe, Singapore style punishment.  They don’t have to feel pain … they just need to have consequences that are consistent with their crimes.  Maybe that’s death.  Maybe … at a bare minimum – it’s life in prison with no chance of parole.  But it had better be serious because slapping these guys with a fine is insufficient.  And regarding the CEO’s … how could they not have known?  Open them up to massive class action lawsuits that they PERSONALLY can be held liable to.  If they’re found guilty … never let them work in the banking industry again and make sure lawyers are in a position to win civil litigation and they will lose their fortunes that way.

We need to stop playing nice.  There needs to be consequences.  Serious consequences.

You can read an infographic on how the LIBOR scandal works HERE.  We’ve written about the LIBOR scandal before HERE or you can read “It’s time to send bankers to jail.“

And ask yourself – do you support the notion that banks should be allowed to self-regulate as conservatives espouse with their less regulation is better for the economy philosophy?  Do you think that the banks have learned their lesson? Or do you want to line them up with legal sanction and apply the consequences of law and justice that are consistent with their crimes?

The NY Times reports on a big criminal case that’s brewing in the Department of Justice HERE:

As regulators ramp up their global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal.

The department’s criminal division is building cases against several financial institutions and their employees, including traders at Barclays, the British bank, according to government officials close to the case who spoke on the condition of anonymity because the investigation is continuing. The authorities expect to file charges against at least one bank later this year, one of the officials said.

The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities. The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission. Collectively, the civil and criminal actions could cost the banking industry tens of billions of dollars.

Media Matters points to the Media’s lack of reporting on this issue HERE:

Major American television news outlets are devoting scant coverage to one of the largest banking scandals in history. Regulators are investigating whether major financial institutions have been manipulating the LIBOR, a key interest rate that banks use to borrow money from one another. The British multinational financial institution Barclays has already been fined $450 million for its role in the scandal. Despite the massive scope of the controversy – LIBOR is “used as a benchmark to set payments on about $800 trillion worth of financial instruments” — CNN, Fox News, MSNBC, ABC, CBS, and NBC have only spent about 12 minutes combined covering the story during their evening newscasts and opinion programming.

Notably, flagship nightly news programs like ABC’s World News with Diane Sawyer, NBC’s Nightly News with Brian Williams and Fox News’ Special Report with Bret Baier have never mentioned the rate-fixing scandal. Sunday morning standards including ABC’s This Week with George Stephanopoulos, CBS’ Face the Nation, CNN’s State of the Union with Candy Crowley, and Fox’s Fox News Sunday with Chris Wallace have also been silent on the story.

The Economist gives the big picture HERE:

Over the past week damning evidence has emerged, in documents detailing a settlement between Barclays and regulators in America and Britain, that employees at the bank and at several other unnamed banks tried to rig the number time and again over a period of at least five years. And worse is likely to emerge. Investigations by regulators in several countries, including Canada, America, Japan, the EU, Switzerland and Britain, are looking into allegations that LIBOR and similar rates were rigged by large numbers of banks. Corporations and lawyers, too, are examining whether they can sue Barclays or other banks for harm they have suffered. That could cost the banking industry tens of billions of dollars. “This is the banking industry’s tobacco moment,” says the chief executive of a multinational bank, referring to the lawsuits and settlements that cost America’s tobacco industry more than $200 billion in 1998. “It’s that big,” he says.

As many as 20 big banks have been named in various investigations or lawsuits alleging that LIBOR was rigged. The scandal also corrodes further what little remains of public trust in banks and those who run them.

The Atlantic says their is a moral decay in today’s Capitalism HERE:

Maybe the acronym at the heart of the scandal is too confusing. Or Americans are simply tired of hearing about greedy bankers. By any measure, though, the Libor bank scandal is an extraordinary example of the 1 percent stealing from the 99 percent – and our crumbling ethics.

Maybe the acronym at the heart of the scandal is too confusing. Or Americans are simply tired of hearing about greedy bankers. By any measure, though, the Libor bank scandal is an extraordinary example of the 1 percent stealing from the 99 percent – and our crumbling ethics.

A liberal, capitalist democracy — and a middle class — can only thrive in a culture where the rule of law is respected, information is reliable and the playing field is as level as possible. If we abandon that, we lose much more than self-respect. We squander a way of life.

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