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A scandal over rate-fixing is about to hit the US
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| Contributor | RP |
| Last Edited | RP Jul 11, 2012 03:56pm |
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| Category | Scandal |
| Author | Roland Jones |
| News Date | Wednesday, July 11, 2012 08:00:00 PM UTC0:0 |
| Description | The potential scope of the unfolding scandal, now acquiring global significance, is enormous. Other banks that have disclosed that they are under investigation for LIBOR manipulation include big U.S. banks, such as Citigroup and JPMorgan Chase, and also HSBC, Deutsche Bank and the Royal Bank of Scotland.
Economists and analysts predict the LIBOR scandal could be one of the most expensive to hit the banking sector since the financial crisis, engulfing more multinational banks with fines that dwarf the one handed to Barclays and further eroding investor confidence in the banking sector.
Shapiro wrote in a blog Wednesday that “coming on top of the reckless and dishonest behavior that led to the 2008 financial collapse, the LIBOR manipulations should finally dispose of the conservative case for self-regulation by Wall Street.”
“If the bankers’ manipulations of the LIBOR was responsible for raising LIBOR rates by just 20 basis points in that period, their shenanigans added between $1.1 billion and $2.2 billion to the yearly interest paid by American homeowners,” he said. “And those mortgages account for less than one percent of all of the financial assets and instruments affected by manipulated LIBOR rates.” |
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