In case it isn’t yet apparent to you, the unfolding scandal over manipulation of Libor and its Euro counterpart Euribor is a huge deal. Even though at this point, only Barclays, the UK bank that was first to settle, is in the hot lights, at least 16 other major financial players, which means pretty much everybody, is implicated.
First, Libor is the basis for pricing over $10 trillion of loans. As the CTFC noted:
"US dollar Libor is the basis for the settlement of the three-month Eurodollar futures contract traded on the Chicago Mercantile Exchange, which had a traded volume in 2011 with a notional value exceeding $564 trillion."
The Wall Street Journal puts total in contracts affected at $800 trillion.Read it at Naked Capitalism
Massive Furor in UK Over Libor Manipulation; Where’s the Outrage Here?
by Yves Smith
Add this to the financial crisis resulting largely from fraud in housing and securitization, foreclosure fraud, and other control frauds, and where are we? We knew this was coming from prior reports, but this is really, really bad, especially coming at the time that the EMU is in turmoil and the global economy contracting. It will take a Hercules to clean out this Augean stable.
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