Rate-Rigging Scandal: Detection of the Scam is Going Global

RATE-RIGGING SCANDAL: as The Slog predicted, detection of the scam is going global.

Mood changing rapidly towards a full Glass-Steagal separation of retail and investment banking

By the Slog

The Slog

The German regulatory equivalent of the FSA, BaFIN, on Friday announced an investigation into Libor/Euribor fraud. Reuters I think had the story first after Der Spiegel, which noted ‘Two Deutsche Bank employees have been suspended after it used external auditors to examine whether staff were involved in manipulating interbank lending rates.’

Yesterday, I posted at length about the blindingly obvious connotations of the FSA’s basis for accusing Barclays – viz, that it was more concerted, international and longstanding than either the MSM or the Tory Party care to admit. This has now been recognised by Brussels, which is mullig new criminal laws a proposal to cover ‘the manipulation of market indices across the EU and a fundamental review of the rules on how Libor is set.’

Michel Barnier, the EU commissioner overseeing financial services, will amend reforms to EU market abuse rules so that potential “loopholes” are closed and criminal sanctions to specifically cover lying about Libor and Euribor. Yesterday, Barnier called mendacious reportig of such benchmark rates a “betrayal” with potentially “systemic consequences”.

And in the US, Barney Frank told the FT that banks “monkeying” with Libor for their own benefit was “outrageous”.

Their own culture of sociopathic iniquity has brought this new regulatory clamp-down onto the heads of investment bankers. Although the naif Dan Hannan still chirrups away about regulation as if it were some form of leprosy, wiser heads who know what they’re talking about (and have a weakness for the odd ethic here and there) disagree. In an interview with the Evening Standard three days ago, old hand Peter Hambro argued for a full-on Glass-Steagal separation between retail and investment banking. Curiously, he referred to retail banks ‘lending to the real economy, and thus operating with a government backed guarantee of deposits’, while he thought merchant bankers should operate only with unlimited liability, and get nothing from the taxpayer at all. I agree with him, but am left wondering what exactly the point then is of such banks per se.
Read the rest of the article here: The Slog

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