How many homeowners with an adjustable rate mortgage indexed to LIBOR fell into default due to the payments increasing by more than they could afford to pay. Now the revelation that these increased payments were “rigged” to increase more than the open market pricing.
THE BIGGEST FINANCIAL SCAM IN THE HISTORY OF THE WORLD.
Washington Blog July 5, 2012
There have been numerous big banking scandals recently, But the LIBOR scandal is the biggest financial scam in world history.
The former CEO of Barclays said today that banks across the world were fixing interest rates in the run-up to the financial crisis.
Professor of economics and law Bill Black notes: It is the largest rigging of prices in the history of the world by many orders of magnitude. Indeed, the scandal effects an $800 trillion dollar market – 10 times the size of the real world economy.
Matt Taibbi explains that this is the “mega scandal of all mega scandals”, because LIBOR is the “sun at the center of the financial universe”, and manipulating LIBOR means that “the whole Earth is built on quicksand”.
Homeowners, credit card holders, students, local governments, small businesses, small investors and virtually everyone else in the entire world has been impacted by the manipulation.
Indeed, the scandal is so big that it will further destroy trust in our financial system and drive many people from investing in the capital markets altogether.