Congressman Dennis Kucinich of Ohio Explains ‘LIBOR’ Scandal

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Congressman Dennis Kucinich of Ohio Explains ‘LIBOR’ Scandal

July 15th, 2012

FAKE NEWS for the Zionist agenda

Late last month, Barclay’s Bank, a multinational bank and
financial institution based in the United Kingdom, admitted to
regulators that it tried to manipulate something called “Libor” before
and during the financial crisis in 2008.

“Libor” is an acronym for
London Interbank Offered Rate. It is a rate used as a benchmark for the
cost of lending throughout the financial system, and it is also used as a
reference rate for a wide range of financial products like car loans,
adjustable-rate mortgages, student loans and credit cards.

The Libor is not based on an objective measure of the interest for
bank-to-bank loans. It is the average of a daily poll of the
Association’s member banks, who give an estimate of the interest rate
they think they would pay if they sought to borrow from another bank.

It is supposed to be the way the financial system assesses the
overall health of the financial system, because if the banks being
polled feel confident about the state of things, they report a low
number, because they assume that if they had to borrow from another
bank, their cost of borrowing would be low.

If member banks feel a low
degree of confidence in the financial system, they report a higher
interest rate. And from that the Libor is calculated, affecting the
interest rate on financial products around the globe.

What has emerged from the Barclay’s Bank inquiry is evidence that
banks may have in fact been deliberately manipulating Libor rates for
years.

The evidence so far is that one arm of a bank responding to the
Libor poll would change their number based on what another arm of the
same bank wanted—and that other arm could consist of the bank’s traders
who make their money on whether the rate goes up or down.

This means
that millions of consumers, investors and businesses have been paying
the wrong interest rate. Or rather, they haven’t been paying an interest
rate that is set according to some legitimate benchmark.

Instead they
are paying a rate based on a gentlemen’s agreement at financial
institutions, a method that practically incentivizes those banks to game
the system to maximize their profits.

And remember, the British Bankers Association, the group that is
responsible for setting the rate, is not a government agency.

It is just
a trade group of big banks– Bank of America, JPMorgan Chase and
Deutsche Bank and others–whose decisions on such a crucial number are
not based on honest accounting or rules or regulatory oversight, but on a
gentlemen’s agreement of honesty.

We don’t know just how deep this scandal goes. But the fact is that
if a fundamental component of our financial system has been or is being
manipulated, we have the right to know about it.

Banks are not above the
law and they should not be allowed to operate in secrecy, especially
when they have a history of taxpayer bailout and when we are forced to
rely on them to provide capital for economic growth.