Elizabeth Warren, a Democratic nominee for Senate in Massachusetts, has said that the Liborscandal calls the integrity of the entire financial system into question."The Libor scandal is more than just the latest financial deception to come to light. It exposes afraud that runs to the heart of our financial system," writes Warren, a long-time Wall Street criticwho is running for the U.S. Senate in Massachusetts."
Sixteen major banks,including Bank of America, JPMorgan Chase, and Citigroup, are underinvestigation for allegedly rigging the Libor, a benchmark interest rate that banks set and use tolend money to each other. It is the basis for hundreds of trillions of dollars' worth of loans andderivatives and its manipulation possibly cost some cities and states millions of dollars.
Warren writes that the rate-rigging offers further proof that the whole financial system lacksintegrity -- possibly the first time Warren and Goldman Sachs CEO Lloyd Blankfein have everpublicly agreed on anything. The journalist and outspoken Wall Street critic Matt Taibbi has also pointed out the far-reachingramifications of the Libor manipulation, telling the news show "Democracy Now!" that "[e]ven
the tiniest manipulation downward, when you’re talking about a thing of this scale, would result
in tens of trillions of dollars of losses."While Barclays has so far borne the brunt of public wrath over the Libor scandal, evidenceemerged this week that the American bank Citigroup may have in fact been the biggest interest-rate manipulator out of all the banks involved
Libor scam: Is Barclays too big to indict?
New York Times Jul 14, 2012, 02.19PM ISTLONDON: The question needs to be faced in the wake of the bank's admitted efforts tomanipulate the London Interbank Offered Rate, known as Libor, the benchmark for countlessinterest rate determinations and approximately $450 trillion in derivative contracts.If the JusticeDepartment was looking for a textbook case of white-collar financial crime - including aconspiracy that was flourishing at the height of the financial crisis - this would seem tailor-made.As the facts released by the government make clear, there were two separate but overlapping