Banks fined record €1.7bn over benchmark interest rate rigging cartel

[BelgianMadCow]

Source: The Guardian

The commission said the Euribor investigation focused on the period between September 2005 and May 2008 and the settlement involved Barclays, Deutsche Bank, RBS and Société Générale. In yen Libor the banks involved in one or more of the infringements are UBS, RBS, Deutsche Bank, Citigroup and JP Morgan. The broker RP Martin facilitated one of the infringements by using its contacts with banks involved in settling Libor.

At a press conference to announce the fines, Almunia said more penalties would follow as some of the firms it had been investigating had failed to settle. "We would have preferred all the parties would have been ready to settle – it is easier for them and for us. Three banks and one broker informed us they were not ready to settle," he said.

This appeared to be a reference to Crédit Agricole, HSBC and JP Morgan in relation to Euribor and the money broker Icap in relation to yen Libor.

SNIP

"What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other," said Almunia.

Read more: http://www.theguardian.com/business/2013/dec/04/banks-rate-rigging-libor-euribor-rbs-citigroup-jpmorgan

---

Shocking, I tell you! That's why these criminals are going to jail. Oh, wait.
No, that's why we're breaking them up. No?
Ah, it's why we're revoking their banking licences. Right?

What's the name for collusion between government and corporations again?

Record fine? Let's see what happens to us when we run a criminal conspiracy of global scale. We'll settle for a 1% fine on our profits, thanks in advance.

[L0oniX]

1. Chump change.

[frylock]

2. yep..

maybe $20 to someone like you or i.

[Jack Rabbit]

3. Are the banks allowed to write off the fine as cost of doing business?

How much did they make on the Libor scam?

[BelgianMadCow]

4. I don't know for sure in these cases, but in the case of JP Morgan and Goldman Sachs, YES

they are allowed to count fines towards tax deductions. Bill Black on the Real news had an entire segment on the "huge" 13 billion fine, of which a part was asked of the FDIC (no kidding), a part used to deduct from taxes, and a part could be done by allowing mortgage relief which they would have to do anyway. Leaving some 4 billion in actual fine, iirc. Hugh!!! Series! Here's a segment on it, I see.

Your question on how much they make on the scam I haven't seen answered. I just know the worldwide derivatives market is over 600 trillion, and a lot of these are based on Libor or Euribor. And then you have the variable and fixed rate mortgages. Manipulating the rate a couple percentage points over say a decade is gonna add up to REAL serious money. Remember, interest compounds.

It's weird actually that people haven't made an estimate of the damage done, or it hasn't figured prominently. I think Elisabeth Warren pressed precisely THAT point in one of her grillings. "How many did you prosecute?" "Euhm...bu but settlement". "How did you determine the damage?" "Euhm....darts."

Of course, getting true numbers is very hard, given shadow banking.

[Celefin]

5. Fining the banks is pointless under the current system

The point of a fine is to pressure somebody to change their behavior unless they want to willingly endanger their own (economic) existence by being fined repeatedly and for ever increasing sums...

Well, if we endanger the banks by high fines we'll just bail them out again.
Kind of self-defeating, no?

Anybody know an apt analogy for this?
Fining big banks is like..?

[BelgianMadCow]

6. "Well, if we endanger the banks by high fines we'll just bail them out again. "

That's precisely the reason Lanny Breuer I believe gave why the big banks can't be prosecuted. It would endager the much-beloved System. Saw that in The Untouchables, I believe.

How can saving banks be above saving decent lives for people? It doesn't make sense to me.

Haven't found an analogy, just that it's a catch-22.

[Celefin]

7. Pure PR

Many, many people will lap this up as some justice finally being served.
but it's not even a slap on the wrist for the banks, more like a slap in the face for everybody else.
Changes exactly zip.

The system is still in place and the next big crash is in the making. Only this time, there will be no public funds to bail them out and the damage will finally be irreversible. Then, things have a pretty high chance of turning ugly.

Anyway, I think we're preaching to the choir here.

[FiveGoodMen]

8. "How can saving banks be above saving decent lives for people?"

The ones doing the saving -- our elected "representatives" -- work for the banks and not for the people.

It isn't supposed to work that way, but we let them get away with it.