The U.K. Serious Fraud Office and City of London Police made the first three arrests in global probes into tampering with benchmark interest rates including the London interbank offered rate.

The three men arrested, ranging in age from 33 to 47, are all British nationals living in the U.K., the SFO said in an e-mailed statement. The agency and police also searched three homes in Surrey and Essex.

Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks such as Libor to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier. Swiss lender UBS AG is expected to face a fine as early as this week that may surpass the record $466 million paid in June by Barclays Plc, the U.K.’s second-biggest bank, to settle claims it attempted to manipulate Libor…

Libor, a benchmark for more than $300 trillion of financial products worldwide, is derived from a survey of banks conducted each day on behalf of the British Bankers’ Association in London. The rates help determine borrowing costs for everything from mortgages to student loans…

Criminal probes by the SFO and U.S. Department of Justice are running in parallel with civil investigations being conducted by the Justice Department’s fraud division, the U.S. Commodity Futures Trading Commission and the U.K. Financial Services Authority.

Anyone think the brave conservatives in our Congress will stand up and encourage prosecution of this criminal fraud?

Here we have an international conspiracy that manipulated rates affecting everything from student loans and mortgages to funding for corporate expansion. The investigating bodies accept as a premise they will not charge the management of these banks as responsible for the crime – only individuals will take the fall for the crime. The banks will pay fines. If the fines are big enough to affect their profit margins, they will pass the cost along to customers.

  1. gimeabreak says:

    The size of the straw-man you have built here is impressive. Not only does this story have nothing to do with “evil conservatives in the Congress”, it is a story about a bunch of Brits getting arrested.

    • JS says:

      @gimeabreak – I don’t know if you read Dvorak regularly, but I believe his “brave conservatives in our Congress” comment was directed to members on both sides of the aisle as both parties’ members accept atrocious amounts of money from banks and the finance industries.

      I’m one of those damned librals, yet I cannot disagree with him on that. (here’s hoping Elizabeth Warren can help that problem a little)

      • Jay says:

        Elizabeth Warren who created an agency where the lawyers have to take intro to banking regulation but get 6 figure salaries? Or the same one who practiced law without a license?

    • MikeN says:

      So when will Eideard put up a post of Obama and the Fed manipulating interest rates in the US? This is causing more harm through inflation than any LIBOR.

      • msbpodcast says:

        LIBOR is used in the ‘States for all loans, mortgages or other fiscal instruments.

        The rates are for 15 maturities – from overnight to 12 months – and are currently provided for 10 currencies (Australian Dollar, Canadian Dollar, Swiss Franc, Danish Krone, Euro, Sterling, Japanese Yen, New Zealand Dollar, Swedish Krona and US Dollar).

        You deal with money in any of those currencies, you deal with BBA Libor™.

    • msbpodcast says:

      The Brits arrested will probably get discretely and quietly killed in prison for fucking with the LIBOR. (If this was the nineteenth century, they’d be drawn and quartered publicly. [Back in the day, they knew how to show their disapproval…])

      It is vital to the economy of the first world.

      The Australian Dollar, Canadian Dollar, Swiss Franc, Danish Krone, Euro, Sterling, Japanese Yen, New Zealand Dollar, Swedish Krona and US Dollar are all negotiated through BBA LIBOR™.

      The LIBOR is a big fuckin’ deal.

  2. PMitchell says:

    Amazing how liberal idiots never seem to think, maybe spend less.You only think tax more spend more.

  3. deowll says:

    A few years back we had a major stink in my little town. Turned out some brain dead ….the good book says you aren’t supposed to call people irresponsible fools but I don’t know what else fits… spent at least ten years paying nothing but interest on a loan used by the sewage system before the city got called on it and they were forced to cut some costs, raise some rates and start paying down the debt. How these people got appointed to their jobs is a bit of a mystery. They aren’t elected.

    They had to know that at some point we were going to have to borrow again to make a major upgrade and that with that bill hanging over our head our position would be untenable. People like this deserve to be flogged and all their assets confiscated and sold to help pay down the damage they did.

    The people running DC make the people running our local sewage system board look reasonable and prudent. No nation is going be able to prosper under such ultra foolish management.

    • So what says:

      They and the previous councils promised to not raise rates. Until, surprise. you HAVE to raise rates. It’s the last council that gets it in the shorts. Town I used to work for didn’t raise rate for over fifteen years. They then had to actually fix all the things in town that were broken on the water and wastewater systems. They asked for a grant and were told twice (in writing) the rates were to low to qualify. At the end of the day rates climbed over 900% over two years. Want to guess at what the rates would have been if they had raised rates about a buck and a half every year for fifteen years?

      That’s right, right were they ended up.

      Water is free it runs in rivers and falls out of the sky. You want clean safe water delivered to your home on demand as conveniently as possible? That’s going to cost.

  4. Captain Obvious says:

    Banks see fraud as the cost of doing business now in the UK and US. I wonder if Mark Carney will be able to get the mess under control at the Bank of England? If he does, that will only leave the US as the last bastion of safe banking fraud.

  5. Quark says:

    What else is new?

    You have 2 choices: Bend over and take it and maybe even LIKE it if you believe popular culture and do the Apple dance everywhere, or go live on Mars!

    There is a third choice but it only applies to a very few people (about “two percent”): Be a part of it and profit!

    Does any other “Trekkie” feel like this is really the world of Frenaganar?!

  6. bobbo, we think with words, and flower with ideas says:

    gimeabreak says:
    12/11/2012 at 9:34 am

    The size of the straw-man you have built here is impressive. Not only does this story have nothing to do with “evil conservatives in the Congress”, it is a story about a bunch of Brits getting arrested. //// so…… why don’t you go ahead and tell us whether or not the evil conservatives in the Congress will stand up and encourage prosecution for fraud?

    After that, tell us how the global interconnected banking system wherein all the major banks coordinate the fraud necessary to affect LIBOR can be limited to three guys in the UK?

    Elizabeth Warren?—you remember WHY she isn’t the head of the new regulatory agency over the banks right?

    Anyone would have to be an idiot, a stooge, or a banker not to YAWN over the obviousness of Eideards post. Are you joining Pedro to make it an even two?

  7. msbpodcast says:

    The manipulation of the LIBOR was done at the behest of some traders on Wall Street and in The City of London because the same interbank offering rate is used for banks lending to each other regardless of the country or the currency.

    I have dealt with LIBOR loans for a totally leveraged purchase of stock offerings and asset purchase (which turned out to be very distressed indeed,) by a bunch of clients of banks (a consortium which included my client at the time. The banks were mere money pimps and had no skin in the game.)

    The banksters made out like bandits (literally,) charging huge fees on everything that wasn’t nailed down, trans-Atlantic fights, wining and dining, and paying themselves handsomely before issuing some money from the last tranche to the chain (which never quite recovered from bankruptcy because the money was being used to meet their operational expenses, not to pursue any growth. [It was a failing regional discount department chain.])

    The banksters issued themselves those little plastic desk trophies encasing the various lending institution logos and congratulated themselves with very healthy bonuses for executing on a very complicated transaction.

    It was also a totally ineffective transaction.

    The chain sputtered into oblivion for four years and finally closed its doors, leaving all of the employees to stare at the almost two hundred sets of department store doors before the millenium changed.

  8. MikeN says:

    Right now, The Fed is causing seniors to lose money on those ‘safe’ Treasury bonds by artificially lowering interest rates, essentially printing money, but hiding it as loans.

  9. MikeN says:

    Let’s investigate Chuck Schumer’s browbeating of NOAA saying they must not categorize Sandy as a hurricane because it would mean insurance companies wouldn’t have to pay out. Thus no hurricane warnings were issued. I thought liberals like Schumer were against politicians interfering with scientists.


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