Wednesday, July 4, 2012

Why limit the fraud to just US banks?

When Barclays bank manipulated key interest rates to bolster profits during the 2008 financial crisis, senior executives said they were following a common practice that regulators implicitly approved, according to documents released by the bank and authorities.

But the illicit acts, which led to a $450 million penalty for the bank, claimed its biggest victims on Tuesday: Robert Diamond, the British bank’s chief executive, and one of his top deputies, Jerry del Missier, the chief operating officer. The scrutiny is expected to grow on Wednesday, when Mr. Diamond appears before a British parliamentary committee.

Even as they resigned, Barclays published documents indicating that some executives thought they were responding to an implied directive from the Bank of England, Britain’s central bank.
Barclays, in its defense, said that it not only advised the Bank of England and other British authorities about interest rate discrepancies across Wall Street, but also the Federal Reserve Bank of New York. The Wall Street firms weren’t told to stop the practice, Barclays said.

And they all no doubt resigned with a hefty severance package.

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