Libor

Developments in the LIBOR/CIBOR scandal

First from By Jyllands Posten of epn:

Secretary for Banks Ole Sohn promises to enter the matter. The rather non-descript title is my interpretation. Ole Sohn (ex-chairman of the dissolved communist party) possibly got the ministry because Minister for Economics (which the Bank Inspection normally refers to) Margrethe Vestager has officially her day-job is in that ministry – could make reprimands awkward.

The interesting part is not the proclamations from the Finance Council, nor the banks; but look at the list of banks that offer quotes for the daily determination of the CIBOR (Copenhagen Inter Bank Offered Rate):

Danske Bank A/S (PINK:DNSKY)
Barclays PLC (NYSE:BCS)
Deutsche Bank AG (NYSE:DB)
Jyske Bank
Nordea
Nykredit
Sydbank
Spar Nord Bank

Danske Bank A/S will be familiar to regular readers as the largest Danish Bank.

Barclays PLC has attracted some undesired attention from the “Serious Fraud Office” in Britain in this context – fixing the LIBOR, not the CIBOR. According to The Guardian:

The investigation is understood to be into the wider market and not just Barclays.

Comment:

A cynic might ask: What lids can be kept on?

Now Deutsche Bank Plc according to Handelsblatt:

Quote:

Deutsche Bank Plc is supposedly under a special investigation by the German Bank Inspection BaFin to clarify the banks entanglement in the scandal of fixing the market interest rate LIBOR, said two persons in the”know” to the Reuters news agency. It is not a routine investigation.

Frankfurter Allgemeine Zeitung is even more perfidious:

Quote:

“Deutsche Bank is cooperating with the authorities in their inquiries.”

That was a literal translation into German of the phrase used by the British police in press releases when they are sweating out a suspect and wanting some very good answers.

Finally El País can hardly contain their gloating when remarking:

Quote:

The British authorities have for one and a half year suspected that the bank didn’t play fair, but they lacked definitive proof. Finally the United Kingdom’s regulating authorities and those of the USA fined the British bank Barclays Plc 290 million pounds (363 million euro’s) for manipulating the LIBOR and the equivalent European interest rate (the EURIBOR) between 2005 and 2009.

Returning to the CIBOR:

1)      The above list is a virtual rogue gallery – and they include all the major Danish Banks.

2)      The claim by the Banks Association that it is “impossible” to fix the CIBOR fraudulently are more than a little pathetic – in so far, as both the British as well as the American bank inspections have decided that it is not only possible; but has been done over at least four years – and to the extend a fine of ½ bio. USD is considered a slap over the wrist.