The LIBOR Scandal Explained

Written by Jan Corpus. Posted in Life, Main Street Polity

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Published on July 31, 2014 with No Comments

“Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world.”

During the 2007-2009 Financial Crisis, banks wanted to appear healthy … So they communicated with each other and submitted lower than usual borrowing rates to be calculated. (It’s similar to lying about your salary on a loan application)

Banks were lending money in the open market at lower interest rates and collecting less profit in return. Their clients, the Investment Vehicles, suffered by not getting their share of lending profits as they would in a normal open market that was not rigged.

“This is the world’s biggest banks stealing money that would otherwise have gone toward textbooks and medicine and housing for ordinary Americans, and turning the cash into sports cars and bonuses for the already rich. It’s the equivalent of robbing a charity or a church fund to pay for lap dances.” Matt Taibbi, Rolling Stone Magazine

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