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Posted by on Jul 10, 2012 in Business, Economy, International, Law, Media, Places, Politics | 4 comments

The Untouchable, Unscrupulous ‘LIBOR Cartel’ (Der Tagesspiegel, Germany)

Despite the mind-boggling scale of corruption at the heart of global LIBOR scandal, will the perpetrators once again get away with little more the ill-repute? Der Tagesspiegel columnist Harald Schumann writes that those responsible for manipulating the LIBOR interest rate, on which upwards of $400 trillion in loans are hinged, are more than likely to escape justice again.

For Der Tagesspiegel Harald Schumann laments in part:

however logical the resignation of one of Europe’s most prolific bonus earners (annual salary in 2011: €26 million, or $32 million), it contributes little to resolving the actual problem. Because it is already clear that this bank scandal will turn out just as all previous such events have: not a single executive will have to answer in person to a criminal court. And this – despite the fact that this scandalous practice reaches well beyond Barclays. Authorities worldwide are investigating 30 more banks, which, like a Mafia-cartel, organized interest rate manipulation across borders. Nevertheless, it is more than likely that executives at the helm of this LIBOR-gang have little to fear but the loss of their reputations.

That is what happened when Richard Fuld triggered the biggest economic disaster since World War II with the bankruptcy of his financial house Lehman Brothers. And so it was when the U.S. Senate documented how traders from Goldman Sachs and Deutsche Bank, under its leaders Lloyd Blankfein and Anshu Jain, not only sold billions of dollars of mortgage-backed securities to customers in Germany and elsewhere, knowing in advance that they would quickly become worthless, and so bet on them lapsing. And so it was when wannabes at the helm of Germany’s Landesbanken frittered away tens of billions at the expense of the people. And so it was when Hypo Real Estate was gambled away into bankruptcy, with German taxpayers bailing it out to the tune of about €20 billion ($24.5 billion), while the top manager responsible, Georg Funke, complained from his retirement home in Mallorca about being unfairly treated.

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Copyright 2012 The Moderate Voice
  • StockBoyLA

    Money talks and in this case the money bankers stole from citizens went (in part) to the election/re-election campaigns of politicians favorable to bankers. As long as those politicians stay in power, the bankers will face no serious repercussions (i.e. criminal charges) from the political world.

    Just another reason why there need to be term limits for ALL politicians. The founding fathers envisioned people from the community representing their community and passing laws in DC. No career politician can really understand the needs of the community they represent. Once you’ve been in DC for 5 or 10 years, you’ve lost touch with the people and/or want to stay in the job for the power and prestige.

    I think the Senators and Representatives should each have a three year term, with one re-election. And those terms can staggered. 1/3 of each chamber is up for re-election each year. And I think a Representative can be re-elected as a Representative, then go on to serve one or two terms as a Senator (or vice versa). So the most anyone can serve in DC as a representative and senator is 12 years. (6 years as a representative, if re-elected and then 6 years as a Senator if re-elected.) The president can remain as is.

  • slamfu

    Why not just a single 6 year term for all of them, Reps, Senators and President. None of them ever have to worry about re-election and they still have enough time to get something done.

  • slamfu

    This LIBOR thing is really scary. It shows that once again we have allowed the financial sector so much free reign that they can once again take the trillions of dollars invested across a terribly complicated system, and not only play craps with it, but intentionally fudge the numbers. These rates are supposed to be iron clad in their calculations, and if they aren’t the whole house of cards comes tumbling down. Crap like this is what sparked the Great Depression although it appears the majority of the world seems to have forgotten that.

    The scariest comment of all was his justification. He did it because the other firms were doing it. My response:


  • Rcoutme

    An even scarier quote is from a trader on Wall Street who had a problem (early in his career, iirc) with a particular investment vehicle. His supervisor’s answer (paraphrased) was:

    I know that it is likely immoral and almost certainly unethical, but I can assure you, it is not illegal.

    That would make it…okay?

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