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Matt Taibbi explains why we should care about Libor while speaking to Occupy's National Gathering in Philadelphia this week.
It seems quite likely that an abnormally high Libor was used to squeeze more cash out of the ARM subprime mortgage holders before the real estate bubble burst, but since we're not ever going to punish bankers, I would not hold my breath waiting for a real investigation:
AFP - The harsh light of the Libor rate-fixing scandal has crossed the Atlantic, with both Citigroup and JPMorgan Chase saying regulators and investigators have requested information from them in a so-far preliminary probe of the case.
Share prices for both -- as well as Bank of America, which has not said if it was asked for information -- have fallen sharply this week amid worries they could be in line for the type of heavy fines laid on Britain's Barclays Bank, at the center of the scandal.
Barclays has been fined $452 million (360 million euros) by British and US regulators for attempted manipulation of the markets for Libor and Eurobor benchmark interest rates between 2005 and 2009.
Three top Barclays executives have resigned and on Friday Britain's Serious Fraud Office said it would formally investigate the case, which has dented London's reputation as a top financial center.
But speculation runs to other banks because the Libor rate is set based on information from 16 international banks, and many think that manipulating it would take more than one bank.
The issue affects not just banks but commercial and retail borrowers around the world -- in the United States, the payments of a floating rate home mortgage loan are often tied to the Libor base rate.
Citi, JPMorgan and Bank of America are three of the 16 banks that fix the rate, as an average of what they say they pay for funds in London's interbank market.
