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Libor Scandle: New York Fed Knew About Libor Manipulations For At Least 4 Years, Rigging Had Occured For Decades

http://www.huffingtonpost.com/2012/07/09/libor-scandal-manipulation-spanned-decades_n_1658696.html

Though the Libor scandal is just breaking now, some financial insiders claim that Wall Street’s been fiddling with the key interest rate for decades.

http://www.huffingtonpost.com/2012/07/13/new-york-fed-libor-documents_n_1671524.html

The New York Federal Reserve on Friday released documents showing it knew banks were manipulating a key interest rate more than four years ago.

The documents, which date back to 2007, show that the Fed became fully aware that banks were lying about their borrowing costs when setting Libor, and chose to take no action against them.

The documents will likely feed growing concerns about whether the New York Fed, its former chief Timothy Geithner and other market watchdogs did everything they could to stop the manipulation. The documents also raise more questions about whether the New York Fed and other regulators were too cozy with the banks involved, looking the other way in order to spare the banks too much pain at a time when the financial crisis was still brewing.

http://www.huffingtonpost.com/2012/07/13/peter-welch-libor-scandal_n_1671087.html

Rep. Peter Welch (D-Vt.) sent a letter to Attorney General Eric Holder Thursday, recommending he seriously look into the high profile Libor scandal that’s swept across the U.K. and the U.S.

According to the Financial Times, the scandal affects thousands of U.S. households. “There are at least 900,000 outstanding U.S. home loans indexed to Libor that were originated from 2005 to 2009, the period the key lending gauge may have been rigged,” Shahien Nasiripour, reporter for the Financial Times, said in his column.

Whether the Libor rate was manipulated higher or lower, it had a direct correlation to how much a household would pay on its mortgage.

Other banks headquartered in the U.S. are under investigation for their alleged involvement in the scandal, including Bank of America, Citigroup and JPMorgan Chase.

http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html

AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).

“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”

http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf

We find that transnational corporations form a giant bow-tie structure — and that a large portion of control flows to a small, tightly-knit core of financial institutions.

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