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U.S. Treasury Secretary Caught

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Mike

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US treasury secretary covered up banks’ rigging of global rates

By Barry Grey
16 July 2012

Documents released Friday by the Federal Reserve Bank of New York implicate Treasury Secretary Timothy Geithner in a cover-up of the rigging of the global benchmark interest rate, the London interbank offered rate, or Libor, by major US and international banks.

An estimated $800 trillion in financial products are linked to the Libor rate. These include $10 trillion in mortgages, student loans and credit cards. Some 90 percent of US commercial and mortgage loans are linked to the index.

By manipulating the rate upward, the banks robbed countless millions of people of billions of dollars in inflated loan costs. By manipulating the rate downward, they deprived states, cities, pension funds and retirees with fixed investments of untold billions in revenues from bond holdings.

The documents, requested by a subcommittee of the House of Representatives that is looking into the Libor scandal, show that as early as 2007 Geithner was aware that British-based Barclays and other banks were submitting false estimates of their borrowing costs to the Libor board in order to boost their profits and conceal financial problems. Geithner was president of the New York Fed from 2003 until 2008, when he joined the Obama administration.

The Fed documents, as well as documents released Friday by the Bank of England, also implicate Bank of England Governor Mervyn King and his deputy, Paul Tucker.
 

Sandhusker

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And the Demokids say that it is the Republicans that are the corrupt bankers.
 

Tam

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Did you expect he was only a crook when it came to his TAXES? :?
 

Tam

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If Lady Justice truly is blind in the US then a fair share of Obama's Administration would not step foot in the White House but should be sitting in the BIG HOUSE. Obama INCLUDED. :roll:
 
A

Anonymous

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Mike said:
US treasury secretary covered up banks’ rigging of global rates

By Barry Grey
16 July 2012

Documents released Friday by the Federal Reserve Bank of New York implicate Treasury Secretary Timothy Geithner in a cover-up of the rigging of the global benchmark interest rate, the London interbank offered rate, or Libor, by major US and international banks.

An estimated $800 trillion in financial products are linked to the Libor rate. These include $10 trillion in mortgages, student loans and credit cards. Some 90 percent of US commercial and mortgage loans are linked to the index.

By manipulating the rate upward, the banks robbed countless millions of people of billions of dollars in inflated loan costs. By manipulating the rate downward, they deprived states, cities, pension funds and retirees with fixed investments of untold billions in revenues from bond holdings.

The documents, requested by a subcommittee of the House of Representatives that is looking into the Libor scandal, show that as early as 2007 Geithner was aware that British-based Barclays and other banks were submitting false estimates of their borrowing costs to the Libor board in order to boost their profits and conceal financial problems. Geithner was president of the New York Fed from 2003 until 2008, when he joined the Obama administration.

The Fed documents, as well as documents released Friday by the Bank of England, also implicate Bank of England Governor Mervyn King and his deputy, Paul Tucker.


Bernanke calls Libor scandal 'very troubling'

By Caroline Salas Gage, Bloomberg News


Federal Reserve Chairman Ben Bernanke defended the Fed's response to manipulation of the London interbank offered rate, saying the Fed cooperated with other regulators and suggested a fix.

"The investigations took place, but they were taken up quite quickly by not the Fed, which is a safety and soundness regulator, but by the authorities that had the most direct responsibility for those issues," Bernanke testified Tuesday to the Senate Banking Committee.

The Federal Reserve Bank of New York "took the lead" and "informed all the relevant authorities" in the U.K and U.S.

Regulators in both countries have defended their reaction to the manipulation of Libor, the global benchmark for $500 trillion of securities, after Barclays was fined a record 290 million pounds ($453 million) for rigging borrowing costs.

The New York Fed last week released documents showing it knew Barclays underreported rates and that Timothy Geithner, then the president of the regional Fed bank and now the Treasury secretary, sent a memo in June 2008 to Bank of England Governor Mervyn King recommending changes to how Libor was calculated. He made a total of six suggestions.



King told Parliament's Treasury Committee Tuesday in London that he only knew of wrongdoing two weeks ago and that Geithner's memo in 2008 didn't highlight malpractice.

"Mr. Geithner was sending that to us as a suggestion for how these rules should be constructed and we agreed with him, but neither of us had evidence of wrongdoing," King said. "The first I knew of any alleged wrongdoing was when the reports came out two weeks ago."

The Fed didn't have information to suggest that banks were manipulating rates "for profit," only that some were "possibly submitting low rates to avoid appearing weak" during the financial crisis, Bernanke said.

Still, misreporting of Libor is "very troubling," he said.

Bernanke said the Fed doesn't know that U.S. banks are innocent of rate-rigging.

"The Libor system is structurally flawed," Bernanke said. An "international effort" is needed to fix the problem, he said.


More oversight and regulation in the worlds banking/securities/investment system is needed not less- when you have Trillions $ of funds in the hands of Bankers who have continuously proven they cannot operate honestly without lots of babysitters....

No wonder- "Banker" has now surpassed such occupations as lawyer, politician, and used car salesman as the least trusted occupation... :(
 

Mike

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Geithner’s devotion to deregulation and closeness to bankers made him just what the soon-to-be-president was looking for to clean up a financial sector positively bubbling over with fraudulence and mendacity. How’s that working out? As for Summers, his major career achievement in the 1990’s was preserving the lawlessness of the financial derivatives market that demolished the American economy. After this feat, he began accepting exorbitant speaking fees from the most ruthless Wall Street firms, including $135,000 for a one-day engagement at Goldman Sachs, in April 2008 (when he was basically a shoo-in for a Washington job) and $45,000 for a similar event at Merrill Lynch, after Obama was already elected. (Gene Sperling, Summers’ successor, was also one of the Goldman boys.)

Anyone who thinks that Washington will compel Wall Street crooks to make restitution to the American people should consider that Obama’s chief-of-staff, the primary mover of the White House’s legislative agenda, is former JPMorgan Chase & Co. executive Bill Daley. Chase was one of the primary recipients of TARP bailout cash, and Daley a major public opponent of the Consumer Financial Protection Bureau. (Daley replaced Rahm Emanuel, who worked for Goldman as a liaison with the 1992 Clinton campaign.)

But the metaphor is of a revolving door, not a one-way street.
 
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