LIBOR: History’s Largest Financial Crime that the WSJ and NYT Would Like You to Forget
By William K. Black
Quito: July 8, 2015
I read a BBC story about the LIBOR criminal trial in the UK and was going to write to criticize its woeful analytics. In preparation I checked the New York Times and the Wall Street Journal to see how they reported the devastating testimony in the trial. I could not, however, find any coverage in my electronic searches and viewing their web pages.
To review the bidding, the LIBOR bid rigging cartel was the largest cartel in history, manipulating the prices of an estimated $300+ trillion in assets. That is a figure considerably larger than the world’s combined GDP. Here are typical statements by the Department of Justice (DOJ) about the LIBOR cartel.
“For years, employees at Deutsche Bank illegally manipulated interest rates around the globe – including LIBORs for U.S. Dollar, Yen, Swiss Franc and Pound Sterling, as well as EURIBOR – in the hopes of fraudulently moving the market to generate profits for their traders at the expense of the bank’s counterparties,” said Assistant Attorney General Caldwell. “Deutsche Bank is the sixth major financial institution that has admitted its misconduct in this wide-ranging criminal investigation, and today’s criminal resolution represents the largest penalty to date in the LIBOR investigation.”
snip* Until recently, I called the LIBOR cartels the largest in history by at least three orders of magnitude. The rigging of foreign exchange (FX) “markets,” however, is so large that that I now have to say that they represent the two largest cartels in history by roughly three orders of magnitude. Both cartels consisted of most of the world’s largest and most elite banks. Indeed, UBS has admitted that after it signed its anti-prosecution agreement with DOJ for its massive LIBOR frauds it violated that deal by continuing to rig the FX “markets” as a member of a group that called itself “the Cartel.” Contrary to theoclassical ideology, both cartels persisted for many years and were ended only by (desultory) government action.
remainder in full: http://neweconomicperspectives.org/2015/07/libor-historys-largest-financial-crime-that-the-wsj-and-nyt-would-like-you-to-forget.html