How Barclay Manipulated the Libor Rates

Posted on July 3, 2012 by | 20 Comments

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20 responses to “How Barclay Manipulated the Libor Rates”

  1. Keith Wilde | July 4, 2012 at 1:22 am |

    A striking, even stunning instance (FDO15 comment) of the culture of hostility to the very idea of governance that seems to have swept the disintegrating United States of America!

  2. Andy | July 5, 2012 at 12:23 am |

    Is MMR stll going?

    • Trixie | July 5, 2012 at 3:34 am |

      Oh, absolutely. MMR has discovered the the big picture of “time” and its importance. Consider this: over the last 30 years productivity gains have soared and average wages have remained stagnant or even declined. Guess where those gains went, with income inequality levels not seen since 1929? But hey, guess what? You have a dishwasher and microwave. You now have more hours in the day to work longer hours (in the event you have a job), receive less pay, and retire later. Quit your whining while I (MMR) makes money off of money. Buck up!

      Bottom-line: turns out there are still 24 hours in a day.

  3. eric tymoigne | July 5, 2012 at 8:10 am |

    phil and trixie, the fed has a monopoly over reserves and does set the price of reserves, ffr and dwr. given that the fed sets the price of reserves. it cannot control the quantity of reserves.

  4. Ray Phenicie | July 5, 2012 at 7:09 pm |

    The folks who want to be in the flat earth society seem to have arrived in great force. The earth does look flat. So with money theories. The planet-world we inhabit is actually spherical in nature. MMT is not wishful thinking; like Galileo, MMT theorists describe what is, not what should be or what might be.

  5. Dan Kervick | July 5, 2012 at 10:12 pm |

    I have to say that I personally find this Libor scandal extremely difficult to understand.

  6. Ruthie | July 6, 2012 at 12:11 pm |

    Isn’t it something akin to our Federal Reserve, i.e., the banks clear their checks at night and if there is insufficient funds, they borrow from rival banks with more reserves? I think in this case, he said if the bank is perceived as weak, it gets charged a higher rate, and if strong a lower one. They then take a median average of rates of 8 banks and use that to establish the LIBOR. Now if any loan (not intra-bank loans but any loan) has an adjustable rate based on the LIBOR, you can see how the lowest rate or highest rate, used to calculate the rate monthly, weekly, or daily can increase or decrease profits. I think that was one of the obstacles Bernanke ran into in the housing market. Many rates in ARMs were not tied to the Federal Reserve rates, but rather to European rates (i.e. a contract might read “so many percentage points below/above LIBOR?’) and he ended up sending trillions to those banks for paper crap mortgages and derivatives therefrom because he could not get them to lower rates as he could banks in the Fed. I think Bill is saying that the top management has to be involved in manipulations because a detailed knowledge of the banks transactions at the time depends on whether high or low LIBOR benefits them the most. This is all speculation on my part and may be entirely wrong. It is ashamed that we can’t go on about our lives in whatever field we want to pursue. No! We gotta stop and try to figure out how the bankers are robbing us all today or how they robbed us yesterday!

  7. jk | July 6, 2012 at 9:38 pm |

    Fraud at the highest levels will continue, http://market-ticker.org/akcs-www?post=208243

    Especially when US and British governments decrease funding for regulatory oversight.

  8. Pingback: US Bank regulator explains how Barclays manipulated the Libor Rates | Think Left