Will the Barclays scandal spread to US banks?

William Cohan talks about the British bank's rate rigging and its implications for other institutions.

By MSN Money Partner Jul 5, 2012 1:51PM
Last week, Barclays (BCS) admitted to rigging the London InterBank Offered Rate (Libor) and agreed to settle the case for $450 million in penalties. But the scandal may not be contained to one bank.

In the video below, William Cohan, a Bloomberg columnist and the author of "Money and Power: How Goldman Sachs Came to Rule the World," explains that many U.S. banks are involved in the Libor market, including Citigroup (C), JPMorgan Chase (JPM) and Bank of America (BAC). U.S. regulators, he says, are looking into their involvement.

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Why is this important? Because the Libor helps determine many consumer interest rates, such as those for mortgages and credit cards. Rigging the rate directly affects all of us. "When you start manipulating something as sacred as the Treasury bond market or the Libor market," Cohan says, "you're really messing with fire here. And this could be a wildfire that would spread."

What can be done? Cohan says politicians can do much but seem not to want to. While there have been many hearings, laws and regulations, Cohan doesn't see anything "sticking in a painful way" to Wall Street executives.
12Comments
Jul 5, 2012 2:39PM
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Where do I find a class-action lawyer, I want to be a named plaintiff, my mortgage is tied to the Libor
Jul 5, 2012 4:17PM
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 This is a SERIOUS WAKE-UP CALL, people! We MUST demand term limits, vote out incumbents and demand jail time for ALL politicians who let crap like this happen on their watch! This is sickening! ENOUGH IS ENOUGH! I will be e-mailing my senator - anyone who values this country should be doing the same!

Jul 5, 2012 3:27PM
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Ideally, someone should get to experience prison and instead of anything "sticking in a painful way", perhaps something would get stuck in, in a most painful way. What the world would pay to see Bob Diamond's face while this is happening. Soooeee pig!
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'Will it spread to US?' ...

Hahahaha! Of course! Do you know of any taxpayers in any other Country who will allow their money to be stolen and used to replace lost money from Bankers illegal misuse of funds? They still need their multi-million dollar bonuses...don't they?

Jul 5, 2012 4:26PM
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Maybe people shouldn't take such a dim view of OWS after all.  However, I will admit OWS could really benefit from some good, sound and intelligent leadership, consolidation/prioritzation of goals, better PR and image (i.e., don't dress like homeless people unless you are, and if you are, go to the Salvation Army and get something better to wear, image is everything these days, the last thing you want to do is remind your audience of the hippies of the '60s).
Jul 5, 2012 5:02PM
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Of course it can spread, the only question is whether the banksters will allow it.  The racketeering operation commonly known as the FED has owned and operated the United States government for fun and profit for almost 100 years now.  It needs to be dismantled, its principals jailed, their assets seized, the US repudiate (default) on this phoney debt and the US need to return to sound money.  The only sound money is gold and silver--a fact lost today on  modern Liberal braindead Democrats, but will soon be re-learned the hard way when civil society breaks down.  Imagine 100 million Liberal Democrats starving without their welfare checks?  It won't be a pretty sight.
Jul 5, 2012 6:50PM
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Not only will it spread to banks, it will spread to brokerage firms, government officials in Washington, many large corporations with financial divisions and media companies.

 

The Federal Reserve and the Central banks around the world have been pumping and dumping this market since 2008.........Anyone here think that's not manipulation? 

Jul 5, 2012 6:30PM
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It is already here,your wonderful government is just hiding it from you because it is election season and the incumbant doesn't appreciate others raining on his so-called parade of mistakes and shortcomings.
Jul 5, 2012 8:01PM
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Take a course in World Economics and Business.  You will find manipulation, greed, scams, favoritism, and much more as many want to have or keep the POWER they have over others.

 

Politicans and Banks work for the Wealthy including (Mafia, War Lords, Drug Lords, Terrorist, MEDIA  and others that fit the category)  as money laundering services to funnel monies/ wealth from one's hands to another while the rest work or stay the working poor.

 In reality it's Blood Money.

 

As long as we fight among ourselves , the Rich are happy.  That is what the Media is for ... to stir up problems to bicker, fight and kill our own brothers and sisters.

 NEWS isn't new ... ..feed us lies and make everything in the world as gloomy as it comes.

 

 Don't vote for OBAMA.  He has given everything what America stood for down the toilet and giving our livelihood away. ( Obama equals FREE COUNTRY come  and get it..... take from the American people what's theirs is now yours)

Vote for ROMNEY ... we might not be rich (only his friends) but at least America will be Strong

and  you'll have a life.

 

Jul 5, 2012 6:50PM
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It reminds me of the movie "Clear and Present Danger" when Harrison Ford found out that the cabinet and even higher up was not operating in an Integrity mode. But its probrably good that we  keep in mind Diamonds History during times of crisis. its difficult to comes to grips with a bad financial situation when so many other individuals are involved. Ask youself what would you really do, if something like this occured, and you're responsible for thousands of individuals. I believe at first sight its easy to point fingers but better to explore other alternatives. Who is perfect? Would you lie cheat and steal for the survival of your family?
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