LIBOR: The London Interbank Offered Rate--The Massive Fraud

LIBOR is an acronym for the interest rate at which banks offer to lend funds to one another in the international interbank market. Like the U.S. prime rate, the LIBOR is a key reference rate that is used for floating transaction rates. For example, one bank may loan another money at a rate of LIBOR plus or minus one percent. It is "primary benchmark for short term interest rates globally." Bbilibor Website

The rate is set by an intermediary, Thomas Reuters, after it reviews rates provided to it daily by a group of 150 major international banks grouped nationally based on 12 currencies. Thomas Reuters is a consulting company with approximately 55,000 employees and revenue of almost $13 Billion. A summary of the calculation can be reviewed at this site.

There is no question now that the large banks have collaborated to perpetrate a fraud in setting LIBOR rates. Their fraud has directly affected a $350 Trillion market by falsifying (understating) risk of investing.

The national governments and banks, including most particularly the U.S. federal government, have been growing more and more intertwined for two centuries. In the U.S., for instance, the Federal Reserve, a private (i.e., not public) organization controls the entire U.S. money supply. It is an organization controlled by central bankers. Since the 2008 financial collapse, the Fed has been directly funding U.S. policy initiatives through "loans" to the U.S. Treasury, a federal agency controlled by the U.S. Executive Branch (i.e., President).

MSM, itself largely a captured industry, is reporting on the fraud. The question now is whether the government will sanction the fraud. Exposure of the fraud is leading to calls for criminal prosecutions and jail. The discretion for such prosecution is within the scope of the politicians. Will they act on it?

Here, in How an old hand would change Barclays, Andrea Leadsom, a British politician (Member of Parliament for South Northamptonshire) calls for systematic deregulation of the banksters.

The mammoth LIBOR banker conspiracy and fraud will doubtless lead some politicians to call for complicated regulatory schemes. However, the regulators these liberals like increase the size of government and their regulators are themselves captured by the bankers. Attempts to regulate just lead to more and more sophisticated frauds. LIBOR fraud is just the latest and hugest banker scam to be exposed. The more the government's (wink, wink) regulate, the more the bankers will evade regulation by dreaming up other scams. Governments need the central bankers to print their money and to fund their government programs and government debt.

As Ms. Leadsom suggests, the best regulation is the free market. Let the banksters fail and go bankrupt. Let them be prosecuted for criminal fraud and go to jail. That is how you stop banker fraud.