The best thing would be if everyone pretended like Libor manipulation never happened. Banks and regulators could build a new system that’s impossible to abuse and we would all move on.
Instead, it looks like regulators and politicians are going to open a pandora’s box in an effort to score political points.
There is no question that every bank the participated in Libor manipulated their rate during the crisis. Everybody knew about it.
Libor was probably manipulated for the past 20 years. Yet suddenly regulators and politicians who were either asleep or complicit during that time have sprung into action.
Now at least 5 countries plus the EU have ongoing probes into each of the 16 banks who were submitting rates. It will be madness.
Instead of banding together, like a law-breaking cartel should, banks are rolling over on each other:
Regulators in some countries are being helped by cooperation from Barclays and UBS. The Swiss bank has reached immunity deals in the U.S., Switzerland and Canada, giving it protection against enforcement action related to certain transactions and submissions, according to regulatory filings.
UBS has provided the Canadian Competition Bureau with emails, transcripts of instant-message chats and trading records, according to court documents.
The banks have also throwing the low-level traders under the bus, firing them and now setting them up for criminal charges:
The Justice Department is plowing ahead with its criminal investigation into traders at Barclays and other banks, according to people close to the agency’s investigation.
They better pray that none of those traders have emails showing the orders to manipulate Libor came right from the top — which they surely did.
