Really? That’s how you feel about it? Well, tell it to the U.S. Department of Justice, because that’s just what’s going down as a result of the LIBOR scandal.
To recap: Bank hustlers manipulated the world’s most important set of benchmark interest rates and thereby impacted the prices of upward of $500 trillion worth of financial instruments. The LIBOR scam devastated state and municipal budgets, squeezed pension yields and ripped off bank shareholders. In a case of jaw-dropping fraud, greedy traders rigged up the benchmark so that they could cash in on bets on derivatives, while banks submitted fake numbers to make themselves look financially healthier. One Barclays official was fond of fudging numbers in exchange for champagne. “Dude…I owe you big time!” gushed a trader in an email to Barclays’ Mr. Fix-It. “Come over one day after work and I’m opening a bottle of Bollinger.”
That’s right. A bottle of bubbly for a scam that screwed your grandma on her retirement savings. Retail bank certificates of deposit, you see, are very popular with senior citizens, and they are priced based on LIBOR benchmarks. As Alexander Arapoglou and Jerri-Lynn Scofield have explained on AlterNet, that alone could cause Grandma’s income to drop by as much as 2 percent. It ain’t like she didn’t need the money! That’s not even counting what happened to her pension — or yours.
LIBOR was, in the opinion of many, the con of the century. But is it a crime without punishment?
About a month ago, the Wall Street Journal reported that a federal court judge had let several banks off the hook, dismissing claims that 16 banks targeted by lawsuits had broken federal antitrust laws by rigging LIBOR. As Matt Taibbi explained in his must-read article on the banking scandal, the federal judge bought the banks’ ridiculous blame-the-victim story that if cities and towns and other investors lost money over LIBOR rigging, it was their own fault. Why would they think the banks were competing, rather than, um, “collaborating”? A collaborative cheer sounded in bank boardrooms around the world, because unless the plaintiffs can win on appeal, the ruling significantly reduces what banks would potentially have to pay for wrongdoing.
Some people in the state of Oregon are feeling just a bit riled by this state of affairs.
New research shows that the state of Oregon alone lost at least $110 million as a result of the LIBOR scam. The research on Oregon is based on an analysis of monthly investment data provided by State Street Bank, the custodian bank for the State of Oregon. On Friday, the Oregon Working Families Party joined a coalition of labor and community leaders to call on Governor John Kitzhaber to sue the Wall Street banks responsible for the costly fraud. According to a statement from the WFP, Oregon has not filed a single lawsuit in connected to LIBOR. The governor remains mute on the issue.