Yet More Evidence That Banks Are Too Heavily Regulated

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The Wall Street Journal reports today that between 2007 and 2010 a group of six big banks conspired to artificially manipulate a key interest rate, the yen London interbank offered rate, also known as yen Libor:

The yen Libor rate is set daily by a 16-bank panel, organized by the British Bankers’ Association. Around 11 a.m. London time every day, each bank submits estimates to the BBA of what rates it would pay to borrow from other banks for different time periods. The top four and bottom four quotes are then discarded, and Libor is calculated using an average of the middle eight quotes.

The Canadian watchdog [investigating the case] said lawyers acting for the cooperating bank had told it that traders at six banks on the yen Libor panel—Citigroup Inc., Deutsche Bank AG, HSBC Holdings PLC, J.P. Morgan Chase & Co., Royal Bank of Scotland Group PLC and UBS—”entered into agreements to submit artificially high or artificially low” quotes, according to the court documents.

The traders used emails and instant messages to tell each other whether they wanted “to see a higher or lower yen Libor [rate] to aid their trading position(s),” according to a court filing. Each of the traders would then “communicate internally” with the person at their bank who was responsible for submitting the Libor quote, before letting each other know if this attempt to influence the quote had worked.

Just a few rogue traders, I’m sure. Nothing to be concerned about. Move along now.

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REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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