On Lie-borgate: “Everyone Knew, And Everyone Was Doing It”!
- On Lie-borgate: “Everyone Knew, And Everyone Was Doing It”!
by Tyler Durden, www.zerohedge.com
“I wish I could say that this was an isolated case… You will hear more on this in due course” is how the UK FSE’s Director of enforcement described Lie-borgate to Reuters this weekend. It seems incredibly that the US regulators and investing public alike are shunning this interest rate rigging scandal as the UK goes to DEFCON 1 with more than a dozen other banks being investigated in the long-running global probe. The Barclays Chairman quit over the weekend (and we assume will not be the last casualty) as The Telegraph notes the ‘dislocation of libor from itself’ – since banks could not be seen borrowing at higher rates for fear of liquidity repercussions, as widespread.
According to the trader the BBA asked for a rate submission but there were no checks and “everyone knew” and “everyone was doing it”. What is incredible is the level of nonchalance that this illegal act had taken on with entire teams of people well aware as open discussion occurred (not clandestine blue-horseshoe-likes-low-libor-style). Indeed this widespread and well-known action of dislocating libor from itself (since in a trader’s words “everyone knew we couldn’t borrow at Libor, you only needed to look at CDS to see that… with real Libor rates 3 to 4 per cent higher than the BBA’s submitted Lie-bor”) has now led George Osbourne, as per the FT, to launch a ‘Leveson-style’ probe into standards in the banking industry – a full, public independent inquiry into the $504 Trillion market’s underlying integrity. Libor had dislocated with itself for a very good reason – to hide the true issues within the bank.