Sunday, July 15, 2012

IS GEITHNER ABOUT TO BE INDICTED?

MAYBE:

NYTIMES TODAY:
As regulators ramp up their global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal. [UMPH ADDED] 
The department’s criminal division is building cases against several financial institutions and their employees, including traders at Barclays, the British bank, according to government officials close to the case who spoke on the condition of anonymity because the investigation is continuing. The authorities expect to file charges against at least one bank later this year, one of the officials said. 
The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities. The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission.  
Collectively, the civil and criminal actions could cost the banking industry tens of billions of dollars.
WASH POST LAST WEEK:
The Federal Reserve Bank of New York said Tuesday it had received word as early as 2007 from the British bank Barclays about problems with the benchmark interest rate that underpins much of global lending. 
Barclays has admitted to rigging Libor, an interest rate that sets the standard for lending in a wide variety of markets — from corporate bonds to credit cards and some mortgages.

On Tuesday, the New York Fed said that it had received “occasional anecdotal reports from Barclays of problems with Libor” in late 2007, as the financial crisis was starting. The disclosure came as Washington policymakers began to increase their scrutiny of the role of regulators in the scandal surrounding the London interbank offered rate, or Libor. 
Every day, major banks around the world submit their borrowing costs, which are then used to compute an interbank rate. Barclays was accused of concealing its borrowing costs — in an effort to drive up profits and send signals that the bank was healthier than it might have been. 
The bank agreed to pay $453 million to American and British regulators to end investigations into the scandal, although other banks’ actions are being reviewed.
In testimony last week before the British Parliament, former Barclays chief executive Robert E. Diamond said the bank had repeatedly brought to the attention of U.S. regulators — as well as U.K. regulators — the problems that the bank was experiencing in the Libor market. He said the bank’s warnings to regulators that Libor was artificially low did not lead to action.
BLOOMBERG:
Treasury Secretary Timothy F. Geithner, who headed the New York Fed at the time, and Fed Chairman Ben S. Bernanke will be questioned about Libor at regularly scheduled Congressional hearings this month. Senate Banking Committee Chairman Tim Johnson, a South Dakota Democrat, said July 10 he is “concerned by the growing allegations of potential widespread manipulation of Libor and similar interbank rates.”
GEITHNER WAS NEGLIGENT AND DERELICT IN HIS DUTIES.

HE SHOULD RESIGN EVEN IF HE'S NOT AMONG THOSE INDICTED.


No comments:

Post a Comment