Did the NY Fed Know About Barclays Interest Rate Fixing?

Discussion in 'Economy' started by usmcstinger, Jul 22, 2012.

  1. usmcstinger
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    usmcstinger Silver Member

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    Barclays Employee to NY Fed, 2008: “we know that we’re not posting um, an honest Libor”

    Although the New York Fed conferred with Britain and American regulators about the problems and recommended reforms, it failed to stop the illegal activity, which persisted through 2009 [...]

    Who was the President of the NY Fed during this period?
    Tim Geithner our Current Sec Treasury.

    Is it a crime to knowingly allow an illegal activity to take place?
     
    Last edited: Jul 22, 2012
  2. expat_panama
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    expat_panama Silver Member

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    All the pompous snarky drivel hit me with a super temptation to respond in kind, but maybe there're some here who work for a living and care about economics. First, we got to understand what the LIBOR is. From here:

    Definition of 'London Interbank Offered Rate - LIBOR'
    An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year.

    Read more: London Interbank Offered Rate (LIBOR) Definition | Investopedia
    It's outside US jurisdiction. Even in the UK what we're talking about is a private non-compulsory association average. Anyone interested can read more at About The Alleged LIBOR "Scandal", Back Away From The Cliff - Forbes
     
  3. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Geithner knew. He claims he told the Bank of England. They claim all he provided were generic recommendations (which the documentation supports).

    Why would Geithner claim he warned them years if he didn't know what was going on back then?
     
  4. georgephillip
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    georgephillip Gold Member Supporting Member

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    Elizabeth Warren's take on LIBOR:

    "It gets worse. During the financial crisis, Barclays and other banks also appear to have consistently manipulated Libor to show lower-than-real borrowing rates to convince the world — and their regulators — that the bank was stronger than it really was. In other words, they rigged the interest-rate reports so that no one would know exactly how much trouble they were in.

    "With a rotten financial system once again laid bare to the world, the only question remaining is whether Wall Street has so many friends in Washington that meaningful reform is impossible.

    "Real accountability would mean prosecuting the traders and bank officials who violated federal laws and prosecuting the executives who knew what they were up to. It would mean forcing executives to pay back any inflated compensation that was based on padded profits.

    "Going forward, the rules would be changed so that Libor is calculated on actual borrowing costs, not estimated or claimed costs. And enforcement agencies would have the resources they need to launch investigations, to fight the armies of private lawyers the banks hire and to prosecute the law-breakers."

    Elizabeth Warren: Libor fraud exposes a rotten financial system - The Washington Post
     
  5. expat_panama
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    expat_panama Silver Member

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    Probably like her take on her Cherokee ancestry--
    [​IMG]
    --where although we find none of her ancestors were tribe members, some were soldiers that drove Cherokee tribes off their lands onto the 'Trail of Tears'.
     
  6. CrusaderFrank
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    CrusaderFrank Diamond Member

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    I found Liz's Harvard Yearbook pic. Note the high cheekbones

    [​IMG]
     
  7. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Clearly, Warren's Cherokee ancestry prevents her from finding out who Timmy Geithner is.
     
  8. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    Of course thats perfectly liberal and stupid. We have capitalism to fix Wall Street. Warren Buffet has always said , if I cant understand it I don't buy it. Wall Street is dead and buried tomorrow if people don't trust it.
     
  9. georgephillip
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    georgephillip Gold Member Supporting Member

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    Probably banks in Bermuda or Panama...

    "In most markets, consumers could simply take their business elsewhere once they learned that the scales were rigged. But interest rates are different. Everyone who borrows money on a mortgage, credit card, student loan, car loan or small-business loan — basically, everyone — is affected by a crooked market on Libor.

    "According to the Federal Reserve Bank of Cleveland, in 2008 more than half of all adjustable-rate mortgages were linked to Libor. Even those who didn’t borrow but saved for retirement or their children’s future got hit with interest rates that had been faked."

    Elizabeth Warren: Libor fraud exposes a rotten financial system - The Washington Post
     
  10. georgephillip
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    georgephillip Gold Member Supporting Member

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    At your next seance why don't you ask Brian if he still appreciates Libor?

    "We learned about Kerry Kennedy’s thyroid medication and sleeping medication; nothing about how Federal Reserve Chairman Ben Bernanke was criticized for comments on Libor in Tuesday testimony on Capitol Hill. "

    If Brian's still dead, why don't you run the question by Helicopter Ben?

    Libor, still underappreciated - Erik Wemple - The Washington Post
     

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