Last week, HSBC paid a $1.92 billion penalty for laundering money for murderers. Today, UBS is fined $1.5 billion for its part in rigging LIBOR over a multiyear period! While these banks will now “beef up their compliance procedures” and fire some traders, unless top management serves prison time, these toothless penalties are simply a cost of doing business and will fail miserably in deterring criminal activity in the future.
Tag Archives: LIBOR scandal
Banksters
What makes the LIBOR scandal so troubling is that the banks involved deliberately prevented us from understanding how serious the banking and liquidity crisis of ‘08 was. Had we known how high LIBOR rates were, things could have been done to limit the ensuing carnage. By lying about rates, the price mechanism was not allowed to function. Going forward, at a minimum, LIBOR should be based on actual transactions.