Bl***y Banks Again

I PRESUME THEY WILL HAVE WIPE(SP?) THE SANTANDER TERMINALS THEY INSTALL IN THE RBS BRANCHES,THAT GOING TO BE GOOD.

Badboy wrote:I PRESUME THEY WILL HAVE WIPE(SP?) THE SANTANDER TERMINALS THEY INSTALL IN THE RBS BRANCHES,THAT GOING TO BE GOOD.

Didn't I say Hester was useless???? Gordon Brown wants shooting for rescueing RBS, but, Santander is not doing very well in Spain so maybe it is a blessing in disguise.

I posted recently about the woman who lost £25,000 because her account wasn't transferred from I think Abbey National

when it was bought by Santander.

I WONDER WHAT WILL HAPPEN NOW RBS HASN'T SOLD OFF THEIR BRANCHES AS RULLED BY EU

Badboy wrote:I WONDER WHAT WILL HAPPEN NOW RBS HASN'T SOLD OFF THEIR BRANCHES AS RULLED BY EU

Not a lot, unless a Bank in America decides to take a chance. RBS has until 2014 to sell. You mark my words , it will be sold off cheaply and the Taxpayer will lose big time.

Santander Cancels £1.6bn RBS Deal Over Delays


Spanish banking giant Santander says the sale of taxpayer-owned RBS branches was moving too slowly, as it pulls out of the deal.


9:06am UK, Saturday 13 October 2012

RBS was ordered to sell branches as a condition of its Government bailout

• 
  

The chief executive of the Royal Bank of Scotland has described the collapsed £1.65bn sale of 316 branches to rival Santander as "disappointing".

RBS said it had received notification from the Spanish banking giant that it would be pulling out of the deal.

The UK state-owned bank had planned to sell the assets, which also included 40 banking centres for small and medium-sized businesses, in a deal approved by the European Commission.

Santander said it had withdrawn after it became apparent that a revised target for the purchase to be completed by the end of this year would not be achieved.

The Spanish bank said the sale was originally scheduled to be completed in 2011, but this was extended to the end of 2012.

RBS Group chief executive Stephen Hester promised there would be "no disruption" for customers and said the taxpayer-backed bank would now begin the search for a new buyer.
Stephen Hester: 'Business as usual'
Mr Hester said: "It is business as usual in all of these branches, and customers don't need to take any action.

"While this is a profitable part of our business that we would rather not part with, RBS has worked hard to ensure it is substantially separate from our UK branch network and corporate business and largely ready to be taken on by a new owner.

"It is, of course, disappointing that Santander decided to pull out of this transaction, especially for the customers and staff involved."

Santander agreed to buy the assets in August 2010, broadly comprising the RBS branch business in England and Wales, and the NatWest branch business in Scotland, along with certain business operations across the UK.

The deal was later approved by EU regulators following competition concerns.

The European Commission ordered RBS - 83% owned by the taxpayer - to sell the assets as a condition for receiving bailout aid from the Government in the wake of the financial crisis.

Santander UK chief executive Ana Botin said: "Our guiding principle throughout this transaction has been a seamless journey for customers - which requires the business to be delivered to Santander UK by RBS in a steady state.

"We have concluded that, given delays, it is not possible to complete this within a reasonable timeframe."

===============================================

I'm not sure Santander is not being disengenuous, Spanish Banks are in dire straits and Santander is feeling the pinch .

However, RBS must share the blame, Hester ought to be replaced , he has proved quite incompetent. My guess is a rich Middle East Country will make an offer to enlarge its presence in the U.K., or maybe the U.S.A.

JP Morgan Chase Shrugs Off London Loss


What banking crisis? Just months after the humiliating trading losses for JP Morgan Chase the bank announces record profits.


3:36pm UK, Friday 12 October 2012

CEO Jamie Dimon was under pressure to recover from the 'whale losses'

• America's biggest bank has surprised markets by posting record quarterly profits despite the fallout from its £3.7bn trading losses in London.
  

JP Morgan Chase said it made $5.7bn (£3.5bn) in the three months - a rise of 34% on a year earlier - driven by a recovery in returns from mortgage lending.

Analysts said the result signalled that the largest US bank by assets was recovering from the so-called "London whale" trades.

It emerged in May that bets in financial markets that were designed to protect the bank by hedging against its other investments, had spectacularly backfired.

The complex, but legitimate, derivatives trades were incurred by its Chief Investment Office in London.

JP Morgan said while the writedown was mostly felt in its first half there was a continuing "modest loss" from the trades in its third quarter.

While revenue from its fixed income trading revenue rose, helped by the Federal Reserve programme to buy mortgage debt, revenue from mortgage lending rose 36% as the US housing market continued its recovery from the bubble that started deflating five years ago.

"We believe the housing market has turned the corner," Chief Executive Jamie Dimon said in a statement.

Richard Branson Renews Interest In RBS


After Santander UK's purchase collapsed on Friday, Sir Richard Branson's banking arm makes an approach to buy 316 RBS branches.


6:27pm UK, Saturday 13 October 2012

Sir Richard Branson's Virgin Money has approached RBS to buy 316 branches

• 
  

By Mark Kleinman, City Editor

Sir Richard Branson's banking arm has made a swift approach to swallow up more than 300 branches at the centre of an escalating row between Royal Bank of Scotland (RBS) and Santander UK.

I have learned that Virgin Money has approached the state-backed RBS in the last 24 hours to express an interest in buying 316 branches that must be sold under orders from the European Commission.

Virgin's interest will provide a glimmer of hope to RBS that it may yet be able to secure a sale ahead of a Brussels-imposed deadline of the end of 2013.

Santander UK's purchase of the business for £1.65bn, which had already been the subject of several rounds of re-negotiation, collapsed on Friday night amid acrimony.

The Spanish-owned bank said it was pulling out of the deal amid problems with the network's IT systems, while RBS suggested that they provided a convenient excuse to withdraw amid the banking industry's torrid operating environment.

A deal would be far from straightforward for Virgin Money, which last year agreed to take Northern Rock off the hands of British taxpayers.

The RBS branch network requires billions of pounds of capital to be allocated to it for regulatory purposes, and Virgin Money may struggle to convince investors that it can do that while also focusing on the integration of Northern Rock.

NBNK Investments, a vehicle set up to buy assets from state-backed banks, would be a logical contender to bid for the RBS branches but is in the process of being wound up following its failure to buy a chunk of Lloyds Banking Group earlier this year.

The collapse of the sale to Santander UK is not RBS's only headache.

As I revealed last weekend, the Edinburgh-based bank is also involved in a tussle with the Treasury over the concessions it must make in order to escape the clutches of a giant state insurance scheme.

Virgin Money and RBS declined to comment.

• Related stories
  
• Santander Cancels £1.6bn RBS Deal Over Delays
  

Just what is it about Richard Branson which makes him so acquisitive??

Virgin Records, Virginmedia, Virgin Airlines, Virgin Banks( He bought out Lloyds), Virgin Rail, and now quick to step in to buy some more Banks. He must be very hungry for Power , certainly no need to make any more money. Virginmedia is c*** and he might be ready to sell it.

THERE ARE FEARS FOR JOBS AT RBS AFTER THE FAILED MERGER.

RBS Might Try to Keep Branches as Santander Deal Collapses


By Gonzalo Vina and Laura Marcinek - Oct 14, 2012 9:35 AM GMT+0100

• 
  

Royal Bank of Scotland Group Plcmight seek to keep the branches it failed to sell to Banco Santander SA (SAN) after the Spanish lender abandoned the deal valued at about 1.7 billion pounds ($2.7 billion).

RBS, Britain’s biggest government-owned bank, sought to dispose of the 316 branches to comply with a European Unionruling after getting state bailout funds during the global credit crisis. RBS Chairman Philip Hampton said yesterday inTokyo that the climate for state aid is “a lot more flexible”now and may allow the Scottish bank to hold on to the branches.





Enlarge image

RBS Might Seek to Keep Branches After Santander Deal Collapses




Chris Ratcliffe/Bloomberg

RBS, Britain’s biggest government-owned bank, had sought to dispose of the 316 branches to comply with a European Union ruling after it received state bailout funds during the global credit crisis. RBS Chairman Philip Hampton said.

RBS, Britain’s biggest government-owned bank, had sought to dispose of the 316 branches to comply with a European Union ruling after it received state bailout funds during the global credit crisis. RBS Chairman Philip Hampton said. Photographer: Chris Ratcliffe/Bloomberg

“It used to be a pretty severe regime but they are making different judgments,” Hampton told reporters in Tokyo, where he has been holding meetings on the sidelines of the International Monetary Fund’s annual gathering. “The U.K. retail banking market is more competitive now than it has been for decades.”

Santander, Spain’s biggest bank, said in a statement Oct. 12 that it was withdrawing from the transaction after delays in its completion, a reason questioned by both analysts and Hampton, who said the issues cited by the Madrid-based bank could have been overcome.

“That’s more likely to be an excuse,” Cormac Leech, a banks analyst at Liberum Capital in London, said yesterday in a phone interview. “It looks like Santander may have problems elsewhere and they’re under more pressure to walk away.”

U.K. Growth


Santander’s decision to abandon the purchase coincides with increasing regulatory pressure on Spanish banks to bolster capital amid mounting real estate losses at home and pain from the three-year-old euro-area sovereign debt crisis.

“People have speculated that it’s not an easy time in general for banks to take on a lot of risk-weighted assets,”Hampton said.

Santander, in a statement yesterday, reaffirmed its commitment to the U.K., saying it will “focus on continuing our growth.” The Spanish bank’s purchase of RBS’s branches would have taken until mid-2014, or a year later than the February 2013 date set by the two banks for the completion of the deal, the Sunday Times said today, citing a report by consulting company Accenture, which had been commissioned by the lenders.

Meanwhile, RBS plans to seek other ways to dispose of the branches, Chief Executive Officer Stephen Hester said in a statement on Oct. 12. RBS might look to sell them in an initial public offering as it did with its Direct Line Insurance Group Plc unit, Liberum’s Leech said. RBS raised 787 million pounds in an IPO of 30 percent of the unit on Oct. 11.

Worked Hard


The British Broadcasting Corp. reported yesterday that RBS has had two approaches for the branches, without citing its sources or who the bidders may be.

Hampton suggested that RBS may get some leeway from EU authorities when it comes to finding a new buyer for the branches, which it was required to do by 2014. Hampton said that the EU has “extended one or two deadlines in other cases.”

A European Commission press officer didn’t have an immediate comment on whether it would view RBS’s possible request to keep the branches favorably or give them more time. Hampton said it would be down to the British government to negotiate more lenient terms with Brussels.

Branches for sale include locations in England and Wales, as well as a business in Scotland. The unit had a 186 million-pound operating profit in this year’s first half and holds 21.7 billion pounds in customer deposits, RBS said.

Boosting Capital


“Much of the heavy lifting associated with a transfer has already been completed,” Hester said in the statement. “RBS has worked hard to ensure it is substantially separate from our U.K. branch network and corporate business and largely ready to be taken on by a new owner.”

The sale also includes RBS’s National Westminster Bank branch network in Scotland, which the lender purchased in 2000. Santander had agreed in 2010 to pay 350 million pounds more than the branches’ net asset value when the deal was scheduled to be completed, Edinburgh-based RBS said at the time. That valued the business at about 1.7 billion pounds.

Since then, Santander has sought ways to boost capital. The bank (BKIR) carried out an offering of as much as $4.09 billion in shares of its Mexican unit Grupo Financiero (BSMX) Santander Mexico SAB last month. Chairman Emilio Botin has said that the bank plans to list its biggest units within the next five years.

Profit Expectations


“One of the reasons why Santander may have abandoned this deal is because overall profit expectations for banks in the U.K. aren’t as great as the market had forecast because of regulatory pressure,” Inigo Lecubarri, who helps manage about $400 million at Abaco Financials Fund in London, said yesterday.

“Additionally, banks are being requested to boost their capital all around the world, and Santander may find some savings by pulling out of this deal at a very little cost.”

The companies originally sought to finish the transaction by the end of 2011, according to Santander’s statement. That was later extended to 2012’s fourth quarter, it said.

“Our guiding principle throughout this transaction has been a seamless journey for customers -- which requires the business to be delivered to Santander U.K. by RBS in a steady state,” Santander U.K. CEO Ana Botin said in the statement.“We have concluded that given delays, it is not possible to complete this within a reasonable timeframe.”

The acquisition would have allowed Santander to make out loans to small and mid-size businesses, adding to its residential mortgage business. Hampton yesterday said lending for such companies had become less attractive recently.

Lower Valuation


The U.K. Treasury said in a statement that the deal is a commercial matter for RBS and Santander.

“The government remains determined to promote greater competition in the banking sector, in order to provide consumers with better services, and a more diverse range of financial products,” the Treasury said in an e-mailed statement. “We have already made substantial achievements such as the sale of Northern Rock, and good progress is being made on the disposal of Lloyds branches to the Co-operative Group.”

If RBS sells the branches in an IPO, Leech said the price would probably be about 900 million to 1 billion pounds in the current environment. He said that investors making that assumption would trim about 2 percent off the bank’s current market value when the London Stock Exchange (LSE) opens on Monday.

“I expect the market to overreact and RBS to decline 3 percent to 4 percent on Monday on this news,” Leech said.

“That’s more likely to be an excuse,” Cormac Leech, a banks analyst at Liberum Capital in London, said yesterday in a phone interview. “It looks like Santander may have problems elsewhere and they’re under more pressure to walk away"

========================================================

Didn't I say yesterday that Santander in Spain is having diffuculties which is probably the reason for backing out???

If the stocks do decline by 3 or 4 % it makes a sale that much cheaper for the Buyer and the Government will lose.

Rate Fixing Scandal: RBS Suspends Key Singapore Trader


By Lianna Brinded: Subscribe to Lianna's RSS feed

October 5, 2012 8:48 AM GMT




Receptionist speaks on phone at lobby of RBS office in Singapore (Photo: Reuters)
RBS has suspended Chong Wen Kuang, a prominent senior trader for government securities, for trying to manipulate the Singapore dollar swap offer rate (Sibor).


According to two unnamed sources cited by Bloomberg, the 83 percent British owned bank put Chong on leave earlier this year for trying to rig Sibor, as they continue investigations into his action.

The same sources say that Chong is the first to be suspended or fired in relation to allegedly rigging key benchmark interbank lending rates, other than those related to the Libor.

Sibor is an interbank lending reference that affects both savings deposit rates and mortgages in Singapore. In Asia it is more commonly used than Libor.

It refers to the average cost of borrowing Singapore dollars for a set period by borrowing US dollars and exchanging them into the local currency, as it reflects the lending rate between borrowers and lenders that are directly or indirectly involved in an Asian financial market.



The Association of Banks in Singapore then calculates the rates by a daily poll.

The RBS representative on Libor matters was not immediately available for comment.

However, in earlier responses on any reports on Libor matters, IBTimes UK was told:

"The Group continues to receive requests from various regulators investigating the setting of LIBOR and other interest rates, including the US Commodity Futures Trading Commission, the US Department of Justice, the European Commission, the FSA and the Japanese Financial Services Agency. The authorities are seeking documents and communications related to the process and procedures for setting LIBOR and other interest rates, together with related trading information. In addition to co-operating with the investigations as described above, the Group is also keeping relevant regulators informed. It is not possible to estimate with any certainty what effect these investigations and any related developments may have on the Group."

Sibor, Libor and Tibor

In tandem, a former RBS trader Tan Chi Min is suing the bank for wrongful dismissal, in court papers filed in New York and with the Singapore High Court, after the bank fired him for allegedly trying to manipulate Libor.

Tan, the former head of delta trading for RBS's global banking and markets division in Singapore, alleged that managers condoned its staff to set the Libor rate artificially high or low to maximise profits.

He also names five staff members that he alleges, made requests for the Libor rate to be altered and subsequently, three senior managers knew the situation while the practice 'was known to other members of [RBS]'s senior management'.

At the end of September, Tan filed a 231-page affidavit which provided transcripts of internal RBS instant messages, including one key message that apparently suggests collusion with other employees.

In an instant message between Tan and Neil Danziger and David Pieri on 2 April 2008, Tan said "Nice Libor. Our six-month fixing moved the entire fixing, hahahah."

However, the transcripts also included conversations between RBS traders and other banks including Deutsche Bank.

The Bloomberg sources says RBS started its own investigations in rate fixing in the middle of 2010 and has already fired four traders in 2011 for manipulating the Tokyo interbank offered rates (Tibor) and the Swiss franc LIBOR (bbalibor) interest rate

The City of London is losing confidence over Bonuses.

Former Bankers girlfriends made money from insider trading.

The Libor rate affected Home Loans and legal action is being taken against the Banks.

VIRGIN MONEY OR A VENTURE CAPITALIST? MIGHT TRY TO TAKE OVER RBS BRANCHES.
RBS COULD SACK THOUSANDS OF WORKERS AFTER SANTANDER FAILED BID.

Badboy wrote:VIRGIN MONEY OR A VENTURE CAPITALIST? MIGHT TRY TO TAKE OVER RBS BRANCHES.
RBS COULD SACK THOUSANDS OF WORKERS AFTER SANTANDER FAILED BID.

There are two potentinal buyers for RBS Branches , Virgin and I can't remember the other firm. There won't be any sacking until it is known who is going to buy

I've been down the bank today to check they've still got all my money.

Lioned wrote:I've been down the bank today to check they've still got all my money.

Did you read that post I made about the Woman who inherited £25,000 , didn't need any money at the time so put it in Abbey National deposit A/C 11 years ago , only making one small withdrawal about 3 yrs ago. This was on T.V. a couple of weeks ago , the Woman needed some money because her Daughter was going to Uni. Because Abbey National had been taken over by Santander they did not have a record of her account and even though she had a book , they said that book could have been an old book and the money taken out.

Obviously, we can say she should have taken her book in to Abbey National every year to have the interest added and she must have been aware that Santander had taken over Abbey National , but the Lady is middle aged and obviously not used to Banks etc. No way was Santander taking responsibility.

FSA Urges RBS Investment Bank Rethink


The City regulator has told RBS to review its ownership of US bank Citizens as it exits a toxic asset insurance scheme.


8:23pm UK, Tuesday 16 October 2012



Video: The FSA Letter To RBS Boss
Enlarge

• 
  
• 
  
  
  
  By Mark Kleinman, City Editor
  
  The City regulator has told the boss of Royal Bank of Scotland (RBS) that he should consider selling its giant US retail bank and shrinking its controversial investment banking operations.
  
  I have learned that the Financial Services Authority (FSA) has informed the taxpayer-backed lender that it is satisfied that RBS should be allowed to leave a massive state support scheme but warned it of the need for continued vigilance over the bank's financial health.
  
  The message from the FSA came in a letter sent last week by Andrew Bailey, managing director of the FSA, to Stephen Hester, RBS's chief executive.
  
  FSA insiders said that Mr Bailey told Mr Hester that selling Citizens, its US banking arm, and radically reducing the size of its global banking and markets operation could be helpful in bolstering RBS's capital position.
  
  The communication, which fell short of a direct instruction from the FSA, was made as part of a broader message signalling the regulator's approval for RBS's exit from the Asset Protection Scheme (APS), which was established in 2008 to insure the bank against losses on more than £275bn of toxic assets.
  
  The Treasury, FSA and RBS could announce as soon as tomorrow that the lender will exit the scheme after satisfying regulators and the Government that there are no circumstances under which it would credibly make a claim using the APS scheme.
  
  RBS's exit from the APS is expected to be positioned as a milestone in RBS's recovery by politicians and the bank. Selling shares owned by the taxpayer remains some way off, but this week's exit from the APS was a prerequisite for ministers to begin contemplating such a move.
  
  Mr Bailey's letter echoed the sentiment expressed to RBS about its structure by UK Financial Investments (UKFI), the body which manages the taxpayer's 82% stake in the bank, according to a source close to the regulator. As Sky News reported earlier this month, UKFI had also told RBS executives that selling Citizens and shrinking the GBM business would be viewed positively.
  
  UKFI has a mandate to operate at arm's length from the Treasury and with an obligation to maximise returns to taxpayers.
  
  George Osborne, the Chancellor, has made it clear privately that he would like RBS to refocus on lending to British homeowners and businesses.
  
  Since RBS was bailed out by taxpayers with a £45bn capital injection in 2008, the bank has been forced to sign up to lending targets and has grown its share of UK lending significantly, none of which has assuaged criticism of RBS from politicians or the media.
  
  RBS has already taken an axe to large swathes of its investment bank, selling or closing its operations in some countries, withdrawing from many product areas and making tens of thousands of redundancies.
  
  The latest intervention from the FSA comes as regulators continue to emphasise the need for British banks to strengthen their capital bases. There remain concerns that with the Eurozone crisis far from resolved, a further shock to the banking system could rapidly erode lenders' core tier one capital – the safest form of assets that they hold.
  
  RBS had a core tier one ratio of approximately 11% at the time of its interim results earlier this year.
  
  Some RBS insiders questioned whether selling Citizens at current market valuations would achieve the FSA's objective of improving its capital position.
  
  Analysts at Shore Capital said today that the bank "should consider selling Citizens if it receives an offer in excess of £6bn as this would…deliver a significant positive impact on the group capital base".
  
  Mr Hester may also sanction a further reduction in the size of RBS's investment bank, particularly where operations do not meet their cost of capital, but this is likely to take place gradually, people close to the bank said.
  
  The RBS chief has said repeatedly that he is willing to offload any part of RBS if it delivered value for investors.
  
  RBS, which successfully floated its insurance arm, Direct Line Group, last week, suffered a fresh setback on Friday when Santander UK abandoned a £1.6bn deal to acquire 316 of its branches.
  
  The FSA and RBS both declined to comment
  

"There is a Conference this morning of the BBA ......which is officially held in lower esteem than any other Business .

The Libor rate is to be taken away from Banks.

There are to be a huge amount of changes in the BBA and the "light touch" regulation is a thing of the past "

How the Labor rate was manipulated.........





LIBOR Scandal Latest Sign of Financial System’s Rotten Core






By Aaron Task







Follow The Daily Ticker on Facebook!

During the 2008 financial crisis, the London Interbank Offered Rate (LIBOR) was a key barometer of the failing health of the banking sector. When LIBOR spiked in late summer 2008, it was a clear sign banks weren't willing to lend to other banks and the term "counter-party risk" became part of the vernacular.

LIBOR is the rate at which banks will lend to other banks and a critical component to the inner-workings of the global financial system. As with the 10-year Treasury note and fed funds rate, literally trillions of dollars of other financial instruments -- including corporate loans and mortgage rates -- are pegged to LIBOR, making it one of most important financial indicators in the world, if not the most important.

Fast-forward to today and the events of 2008 still resonate.

Last week, Barclays paid roughly $450 million to settle charges by U.S. and U.K. regulators that its traders had manipulated LIBOR. A day after he resigned as Barclays CEO, Robert Diamond appeared before U.K. Parliament last week and testified that regulators on both sides of the Atlantic were aware of irregularities in the LIBOR market as far back in 2007 and did nothing about it.

Barclays felt that some competitors were low-balling the rates being charged by other banks in order to make themselves look better to regulators and investors. In addition, Diamond testified that Paul Tucker, now a deputy governor at the Bank of England, expressed concern that Barclays was reporting higher LIBOR rates than some competitors; at least one Barclays executive took Tucker's concern as a signal Barclays too should report lower LIBOR rates.

Tucker is set to testify before Parliament Monday on these matters, which have gripped London's financial circles much in the same way all of Wall Street was watching Jamie Dimon's Congressional testimony last month.

But JPMorgan's estimated $3 to $5 billion loss on its 'London Whale' trades really is a tempest in a teapot -- as Dimon initially declared -- compared to allegations of LIBOR manipulation. Imagine finding out the Dow is rigged or the S&P 500 doesn't really measure the stocks of the 500 largest U.S. firms and you have a hint at how big a deal this really is.

In addition to allegations firms were under-reporting LIBOR rates during the crisis, there's a second scandal: that Barclays traders allegedly rigged the LIBOR rate to ensure certain derivatives bets paid off.

If recent history is any indication, it's very unlikely Barclays traders were operating in a vacuum; typically if one Wall Street firm is pushing the envelope (or breaking the law) to gain an advantage, its competitors won't be far behind. Most observers believe Barclays is just the first firm to settle related allegations.

'Expect More Ugly Revelations'

"We expect more ugly revelations" over what's been dubbed LIBOR-gate, writes David Kotok of Cumberland Advisors. "Other institutions may be implicated. Critics of emerging-market governance standards need to look in the mirror. The so-called developed markets now exude a rising stench."

Kotok notes that if LIBOR was manipulated that means the so-called TED-spread -- the difference between LIBOR and rates on Treasury bills -- is also suspect.

"If one side of the TED is rigged, all of it is in doubt," he writes. "The TED is critical, or was critical. It was (is) used to indicate the market-based assessment of risk in the global banking system. A rigged TED was an unthinkable act. So much for 'unthinkability.'"

Indeed, this LIBOR scandal is yet another sign of how the financial system -- which is built on trust -- is rotten at its core, something that's seemingly only lost on people at the very top. The fact there isn't more public outrage about this scandal is partially due to its London roots and somewhat wonky nature. But it's also a reflection of the public's fatigue with revelations of lawlessness in the financial industry that, to date, hasn't resulted in people going to jail or more serious efforts to re-regulate the industry.

"The incentives of the banks is still to cheat and do things that are either illegal or immoral," NYU Professor Nouriel Roubini said an interview on Bloomberg TV this weekend. "Nobody has gone to jail since the financial crisis. The banks, they do things that are illegal and at best they slap on them a fine. If some people end up in jail, maybe that will teach a lesson to somebody. Or somebody hanging in the streets."

I don't think Roubini is advocating violence but predicting the masses might take matters into their own hands if elected officials and regulators don't get out of the pockets of Wall Street and start prosecuting the fraud.

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com

Follow The Daily Ticker on Facebook!

During the 2008 financial crisis, the London Interbank Offered Rate (LIBOR) was a key barometer of the failing health of the banking sector. When LIBOR spiked in late summer 2008, it was a clear sign banks weren't willing to lend to other banks and the term "counter-party risk" became part of the vernacular.

LIBOR is the rate at which banks will lend to other banks and a critical component to the inner-workings of the global financial system. As with the 10-year Treasury note and fed funds rate, literally trillions of dollars of other financial instruments -- including corporate loans and mortgage rates -- are pegged to LIBOR, making it one of most important financial indicators in the world, if not the most important.

Fast-forward to today and the events of 2008 still resonate.

Last week, Barclays paid roughly $450 million to settle charges by U.S. and U.K. regulators that its traders had manipulated LIBOR. A day after he resigned as Barclays CEO, Robert Diamond appeared before U.K. Parliament last week and testified that regulators on both sides of the Atlantic were aware of irregularities in the LIBOR market as far back in 2007 and did nothing about it.

Barclays felt that some competitors were low-balling the rates being charged by other banks in order to make themselves look better to regulators and investors. In addition, Diamond testified that Paul Tucker, now a deputy governor at the Bank of England, expressed concern that Barclays was reporting higher LIBOR rates than some competitors; at least one Barclays executive took Tucker's concern as a signal Barclays too should report lower LIBOR rates.

Tucker is set to testify before Parliament Monday on these matters, which have gripped London's financial circles much in the same way all of Wall Street was watching Jamie Dimon's Congressional testimony last month.

But JPMorgan's estimated $3 to $5 billion loss on its 'London Whale' trades really is a tempest in a teapot -- as Dimon initially declared -- compared to allegations of LIBOR manipulation. Imagine finding out the Dow is rigged or the S&P 500 doesn't really measure the stocks of the 500 largest U.S. firms and you have a hint at how big a deal this really is.

In addition to allegations firms were under-reporting LIBOR rates during the crisis, there's a second scandal: that Barclays traders allegedly rigged the LIBOR rate to ensure certain derivatives bets paid off.

If recent history is any indication, it's very unlikely Barclays traders were operating in a vacuum; typically if one Wall Street firm is pushing the envelope (or breaking the law) to gain an advantage, its competitors won't be far behind. Most observers believe Barclays is just the first firm to settle related allegations.

'Expect More Ugly Revelations'

"We expect more ugly revelations" over what's been dubbed LIBOR-gate, writes David Kotok of Cumberland Advisors. "Other institutions may be implicated. Critics of emerging-market governance standards need to look in the mirror. The so-called developed markets now exude a rising stench."

Kotok notes that if LIBOR was manipulated that means the so-called TED-spread -- the difference between LIBOR and rates on Treasury bills -- is also suspect.

"If one side of the TED is rigged, all of it is in doubt," he writes. "The TED is critical, or was critical. It was (is) used to indicate the market-based assessment of risk in the global banking system. A rigged TED was an unthinkable act. So much for 'unthinkability.'"

Indeed, this LIBOR scandal is yet another sign of how the financial system -- which is built on trust -- is rotten at its core, something that's seemingly only lost on people at the very top. The fact there isn't more public outrage about this scandal is partially due to its London roots and somewhat wonky nature. But it's also a reflection of the public's fatigue with revelations of lawlessness in the financial industry that, to date, hasn't resulted in people going to jail or more serious efforts to re-regulate the industry.

"The incentives of the banks is still to cheat and do things that are either illegal or immoral," NYU Professor Nouriel Roubini said an interview on Bloomberg TV this weekend. "Nobody has gone to jail since the financial crisis. The banks, they do things that are illegal and at best they slap on them a fine. If some people end up in jail, maybe that will teach a lesson to somebody. Or somebody hanging in the streets."

I don't think Roubini is advocating violence but predicting the masses might take matters into their own hands if elected officials and regulators don't get out of the pockets of Wall Street and start prosecuting the fraud.

Aaron Task is the host of The Daily Ticker. [

The Libor rate explained so we can understand more......bl**dy Banks !!!

Why Rigging the Libor Interest Rate Is a Big, Rotten Deal


July 10, 2012 RSS Feed Print



A view of Barclay's headquarter at London's Canary Wharf financial district, Thursday, June 28, 2012. Barclays PLC and its subsidiaries will pay about 453 million US dollars to settle charges that they tried to manipulate interest rates that can affect how much people pay for loans to attend college or buy a house. Britain's Barclays is one of several major banks reportedly under investigation for such violations.

Another financial scandal means it's time for another impromptu primer on the technicalities of banking—and the astonishing chutzpah of bankers.

In this case, it appears that traders at Barclays and possibly other banks manipulated a key interest rate between 2005 and 2009, to help enhance the profitability of their trades. For once, a top banking official has paid a price. Former Barclays CEO Bob Diamond has resigned and forfeited $31 million worth of bonuses in a settlement with the bank. It still isn't clear if Barclays broke any laws or if authorities will press charges.

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But the evidence is mounting that traders, perhaps even with the tacit approval of regulators, were able to force down the London Interbank Offered Rate, otherwise known as Libor. Most consumers pay no attention to Libor, yet it affects millions of bank customers directly and indirectly. If bankers were indeed able to manipulate the rate, it may be the most shocking example yet of their ability to exploit the basic machinery of the global financial system for their own gain.

Libor is a measure of the interest rates that global banks charge each other for short-term borrowing, without any guarantees against default, such as those offered in the United States by the FDIC. It's monitored by government agencies, such as the Federal Reserve and the U.K.'s Financial Services Authority, but it isn't regulated by anybody.

There are several Libor rates, reflecting the interest paid on short-term loans ranging in duration from one day to one year. In effect, they represent an average of the real-world rates banks are actually paying to borrow. Ordinarily, Libor rates track other interest rates very closely, since there's usually little or no risk that banks lending to each other will default on their loans.

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But during times of economic stress, such as the 2008 financial crisis, Libor is a first-line indicator of rising danger. From 2004 to the middle of 2008, for example, Libor rates for loans of various duration rose and fell in almost exact proportion to changes in the Federal Reserve's short-term interest rates. But starting in Sept. 2008, there was a sharp divergence. The Fed continued to cut its own rates, as the financial crisis intensified. But Libor rates skyrocketed. That indicated that banks were suddenly very nervous about getting back any money they lent out, even to other banks. Those concerns were validated when Lehman Brothers declared bankruptcy and other big banks, such as Citigroup, Bank of America, Royal Bank of Scotland and Lloyds, required government bailouts to remain solvent.

Currerncy traders watch Libor rates constantly and make bets when they feel the spread between Libor and other types of rates represents an opportunity. But Libor affects a lot of ordinary people who have never even heard of it. The interest rate on many loans, including some student and business loans and adjustable-rate mortgages, are pegged to Libor, the same way other loans are pegged to the U.S. prime rate. So if Libor rises, the interest rate paid on a lot of typical loans will rise, too.

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Since Libor also represents the level of concern bankers feel about getting their money back, it also reflects the availability of credit. And sure enough, when Libor spiked in the fall of 2008, it signaled the start of a credit freeze that left many business owners and consumers unable to get loans. Some banks even called in lines of credit, a move that pushed some smaller businesses into bankruptcy. So Libor can be a very accurate indicator of tough times ahead.

One oddity of the Barclays scandal is that traders allegedly forced Libor down, not up, which means that anybody getting a loan pegged to Libor may have unwittingly benefited from the machinations of bankers. There's also some evidence that regulators at the Financial Services Authority, and maybe even the Bank of England, knew that traders were reporting lower Libor rates than they were actually paying or receiving in the market, which means that the reported rates followed by everybody else would have been understated. So more investigating needs to be done.

Whatever the case, it's alarming that bankers were able to deliberately influence Libor at all. Borrowers need to know that the interest rates they pay are determined by ordinary market forces, not by the whims of pinstriped sharpies.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

The American Government is to sue Bank of America over it's Home Mortgage Business resulting in so many properties being repossessed.

24 October 2012 Last updated at 21:45

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Former Goldman Sachs board member jailed for two years


Rajat Gupta described the guilty verdict as "devastating"
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A former Goldman Sachs board member who was found guilty of four criminal counts of insider trading has sentenced to two years in jail.

Rajat Gupta, 63, had leaked boardroom secrets to Raj Rajaratnam, a former hedge fund manager now serving 11 years in prison.

US District Court Judge Jed Rakoff also ordered Gupta to pay a $5m (£3m) fine.

Gupta said he regretted the impact of the case on his family and friends.

Reading from a statement, he said: "The last 18 months have been the most challenging period of my life since I lost my parents as a teenager."

He added: I've lost my reputation I built for a lifetime. The verdict was devastating."

During the court case, which resulted in Gupta being found guilty in June, the jury heard secret recordings of conversations between him and Rajaratnam.

The trial focused on a phone call made to Rajaratnam on 23 September 2008, minutes after Gupta had listened to a private conference call discussing a $5bn (£3.2bn) investment in Goldman Sachs by Warren Buffett's company Berkshire Hathaway. The deal was due to be made public after stock markets closed that day.

According to phone records, Rajaratnam bought $40m in Goldman Sachs stock moments after the phone call, earning nearly $1m.

Gupta, who was born in India and educated at Harvard, also served on the boards of Procter & Gamble, the Rockefeller Foundation and the Bill and Melinda Gates Foundation.

24 October 2012 Last updated at 21:26

Share of America sued for $1bn for alleged mortgage fraud


Bank of America has yet to comment
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• Wells Fargo sued for loan fraud
  
• JP Morgan faces $20bn fraud suit
  
• Legal costs hit Bank of America
  

Bank of America is being sued for $1bn (£624m) for alleged mortgage fraud.

The civil lawsuit has been brought by the US Attorney Preet Bharara, the top federal prosecutor in Manhattan, New York.

He accuses Countrywide Financial, which Bank of America bought in 2008, of selling thousands of toxic home loans to Fannie Mae and Freddie Mac.

Fannie Mae and Freddie Mac are government agencies that support the US mortgage market.

Bank of America has yet to comment.

Countrywide is accused of running a trading scheme from 2007 to 2009 that was deliberately designed to process loans at high speed without checks on their quality.

Mr Bharara said: "This lawsuit should send another clear message that reckless lending practices will not be tolerated."

He added that Countrywide's practices were "spectacularly brazen in scope."
Similar cases
The legal action against Bank of America follows similar moves by the US government earlier this month against Wells Fargo and JP Morgan Chase.

On 2 October, JP Morgan was sued for allegedly defrauding investors who lost more than $20bn on mortgage-backed securities sold by Bear Stearns.

JP Morgan, which bought the investment bank in March 2008, said the allegations related to actions at Bear Stearns prior to its takeover.

Meanwhile, on 10 October, Wells Fargo was also sued by federal authorities for alleged mortgage fraud.

The US government alleges that Wells Fargo lied about the quality of mortgages it handled, leading to huge losses for the Federal Housing Administration.

Wells Fargo has denied the allegations.

RBS is said to have sealed papers held in the Singapore Bank where a member of staff is accused of affecting the LIBOR rate.

HERE'S A THOUGHT;COULD PEOPLE GIVEN SUB-PRIME LOANS SUE IF THEY WERE EVICTED FROM THEIR HOMES AS A RESULT,IF ALL THOSE SUED,IT COULD BE THE MOTHER OF ALL LAWSUITS.