Experts Warned CFTC About Potential Libor Rigging 15 Years Ago

By: Thursday September 6, 2012 10:59 am

The Commodity Futures Trading Commission has led the investigation into the Libor rate-rigging scandal. They have pursued civil charges, and worked with the Justice Department on criminal ones. But when the CFTC first learned about how banks could easily implement rate-rigging, they ignored it – when the agency was under the executive branch of President [...]

Banks Want Another Account to Disguise Their Risky Trades

By: Wednesday August 29, 2012 12:58 pm

Whither the Volcker rule? After a flurry of discussion about it in the wake of JPMorgan Chase’s Fail Whale trades, we’ve heard significantly less of late. In fact, regulators blew through a July deadline on finalizing the Volcker rule. The last word we had was that the deadline was pushed back to the end of [...]

Federal Financial Regulators Getting Around to Investigating Money Laundering, After Being Schooled on Standard Chartered

By: Monday August 20, 2012 12:33 pm

Benjamin Lawsky’s impertinent insistence that Standard Chartered Bank actually did something wrong when it facilitated $250 billion in money laundering has really scrambled the federal regulatory response to similar charges. Because the dirty secret is that practically EVERY big bank may have engaged in similar behavior. And now the regulators, embarrassed into action by Lawsky, [...]

OCC’s Chief Counsel, Julie Williams, Resigns, Heralding Possible New Era at the Regulator

By: Tuesday August 14, 2012 6:55 am

It’s been a good couple weeks for executive agency retirements. First we witnessed the end of the reign of Cass Sunstein from OIRA, which centralized regulatory power inside the White House rather than at the agency level, and who liked to distribute industry talking points and gut regulations in service to those industries. Believe it [...]

Fraud Pays: Regulators Slow to Prosecute, Focused on Civil Rather than Criminal Penalties

By: Wednesday August 8, 2012 8:15 am

The question that many of us asked in the wake of the revelations about money laundering at Standard Chartered Bank is why the federal regulators did apparently nothing, and that this had to get revealed by New York’s Department of Financial Services. The credible speculation here is that the feds were working on a deferred [...]

Libor Could Be Scrapped By British Regulators

By: Tuesday July 31, 2012 8:55 am

Global financial regulators will review whether to scrap the Libor system, and I think they’ll actually make the correct call here. The reputational risk from this scandal has been massive, not only to the banks but to the regulators. And at the heart of it is the simple question: why is the benchmark lending rate [...]

British Bankers’ Association Got Weekly Calls About Libor Rigging

By: Thursday July 26, 2012 9:35 am

It’s really getting difficult to take the entire global financial regulatory apparatus seriously in the wake of the Libor scandal. The British Bankers’ Association was given weekly warnings in 2008 that the process of setting the Libor interest rates was being distorted. A former member of the Libor compilation team at Thomson Reuters says it [...]

Regulatory Failure Evident Throughout Housing and Foreclosure Crisis

By: Thursday July 19, 2012 8:55 am

The report that regulators are failing to enforce compliance on Servicemember Civil Relief Act violations fits in a continuum of regulatory failure around the foreclosure crisis. We know that HAMP and HARP have underperformed, and that the settlements around foreclosure fraud fell somewhat below a slap on the wrist. The foreclosure review process, initiated by [...]

Bank Camo-Washing Not Leading to Actual Payouts for Servicemembers

By: Thursday July 19, 2012 8:11 am

As much as the banking industry has been revealed as corroded and broken over the past few weeks, the regulatory apparatus hasn’t fared much better. They’ve shown themselves to be asleep at the wheel on Libor, unable to stop money laundering at HSBC, and captured by the industry they’re supposed to regulate. And the latest [...]

Revelations of Ethics Lapses at Treasury Speak to Regulatory Capture

By: Monday July 16, 2012 9:35 am

Because the Treasury Department needed another headache, a series of FOIA requests show that individual employees engaged in a series of unethical activities: Treasury Department officials have been cited for soliciting prostitutes, breaking conflict-of-interest rules and accepting gifts from corporate executives, according to the findings of official government investigations. The revelations of unethical behavior at [...]

Libor Scandal Highlights Regulatory Failure

By: Monday July 16, 2012 6:55 am

I said yesterday that I could actually envision a few criminal prosecutions on Libor rate-rigging in the coming months. We know that plenty of banks are involved – I don’t think Barclays warned their employees about additional revelations at other banks, they simply prepared them for it, as a pretext to assuring that the heat [...]

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