CNBC highlights the different warning signals from the region that have accentuated a wall of worry that has spread across the globe.» Read More
American authorities did not warn British officials about the rate-rigging scandal at the height of the financial crisis in 2008, according to documents released by the Bank of England on Friday, the New York Times reported.
The flaws in the rate-setting process have been exposed by the latest banking scandal. Regulators around the world are investigating whether big banks gamed the rates for their own benefit before and after the financial crisis, the New York Times reports.
"Looking at those emails, it looks like they had pretty explicit notification of some very bad behavior, and I don't understand why they didn't investigate," Bair told CNBC.
Regulators are focusing on at least four of Europe’s biggest banks as they investigate the attempted manipulation of the region’s benchmark interest rate, The Financial Times reports.
The very existence of the London Interbank Offered Rate (Libor) has been threatened by the escalating scandal involving banks allegedly manipulating the rate during the credit crisis.
What exactly can be done to fix the Libor system or is it worth fixing at all? Catherine Boyle has more.
The thousands of community banks have often said their much larger counterparts have trampled on them. Now some hope the latest Wall Street scandal could give them ammunition to strike back.
Libor is “structurally flawed” and an international effort would be needed to restore the rate’s credibility as the leading benchmark for mortgages, derivatives and corporate lending around the world, Ben Bernanke, US Federal Reserve chairman, told Congress on Tuesday, the Financial Times reports.
In this excerpt from a live interview at the "Delivering Alpha" conference presented by CNBC and Institutional Investor, Treasury Secretary Timothy Geithner defends his actions in 2008 after the New York Federal Reserve learned that Barclays and other banks were not reporting accurate data on a key London-based interest rate. He also promises more enforcement is coming.
"There is a real confluence of events here, the British banks are getting repeatedly nailed by the US authorities this month, there is a risk here that the US authorities, whether it is lawmakers or regulators start to perceive the British banking industry as a lawless cesspit," David Enrich, European banking editor at the Wall Street Journal, told CNBC.
"The Bank of England at that time were desperate to try and get interest rates down because they were so worried about the state of the economy and the state of the financial system and every bank has an incentive to show that it has a low cost of funds to show that it is financially stable," Jan Toporowski, professor of Economics, SOAS, told CNBC.
Bank of England governor Mervyn King and his deputy Paul Tucker are going to be in front of the Treasury Select Committee the Libor scandal isn't officially on the agenda but clearly that is going to come up and may have implications for central bank succession planning. Catherine Boyle has more.
A drought-fueled rally in soybeans, corn and wheat is raising fears of another round of food price inflation, posing an unwelcome complication for policymakers, particularly in emerging Asia, where higher consumer prices may hinder their ability to ease monetary policy.
Trying to ride a risk rally in currencies? Better hold on tight.
Trader Stephanie Link is keeping a close eye on a sell-off. "If it gets down to the low $80's I'd pull the trigger," she says.
In light of the recent scandals at Barclays, JPMorgan Chase, and others, the obvious question that must be asked is: Where was the board?
As regulators ramp up their global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal. The New York Times reports.
Mary Jo Jacobi, fmr assistant US Secretary of Commerce, told CNBC, "I don't see how we can avoid the Libor scandal blowing up, it is a big scandal you have disclosures from the New York Fed going back to 2008, you have Deutsche Bank turning states evidence in a plea for leniency, who knows where else it is going to go."
Tim Bush, head of governance and Financial Analysis at PIRC (Pensions Investment Research Consultants Limited) and Simon Nixon, European editor at the WSJ, joined CNBC to discuss whether the the Libor scandal will shift focus from Barclays.
The Libor rate-rigging scandal has had an adverse effect on London’s reputation as a leading financial center, Mark Boleat, policy chairman at the City of London Corporation, told CNBC.