Timothy Geithner in 2008 sent a private memo to Bank of England Governor Mervyn King calling for six changes that were meant to improve the credibility and integrity of the London interbank offered rate, a key interest rate that is now at the center of a international banking scandal, according to documents reviewed by The Wall Street Journal.
That would make him President of FRBNY, as that pre-dates the inauguration. But it gets better:
The recommendations, which came in a June 1, 2008, memo, included a call to "eliminate incentive to misreport" by banks.
Really?
Now let's see if I'm analyzing this correctly:
You work for an alleged regulatory organization. Your job is to enforce laws and regulations in that regard.
And it appears there is written evidence that you were aware that the numbers being reported were intentionally wrong, as you want to "eliminate incentive to misreport" (specifically, how did you know such incentive existed unless you detected it?)
I am willing to bet that there is no legal responsibility for The Fed to report suspected market manipulation that might be felonious to anyone over at Justice..... am I right?
And if so, why doesn't such a requirement exist when if a simple teller transaction at my local bank, if it "appears suspicious", must be reported to the authorities, in writing on a SAR form?
That's what I thought.
PS: Are you still wondering why you've been getting robbed?
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That says Barclays blew the whistle prior to May 2008!
I think it's pertinent where the biggest leverage was, leaving the Banks most vulnerable to rate shifts, and to me that points straight to the ECB and Euribor . . . . . .
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If the State was a Nanny, it would have been fired for incompetence, unreliability, and having its hands in the till, a very long time ago now.
8:49 a.m.: Libor has come up (we missed who is asking the question). Phew! With all this talk of the London Whale we'd almost forgotten about the Libor scandal for a few moments.
“We’ll be totally open to investigators…Not all companies are in the same position,” Dimon says.
Morgan Stanley analysist follows up with question that is on our minds as well. If controls of London based CIO office were so bad, should we be concerned about controls over London-based Libor reporting.
Dimon's answer is a bit odd. He says he cannot prove a negative about the lack of control problems in other areas of the company. Says that controls in Europe, apart from CIO, are strong.
Dimon is the CEO. Sarbanes-Oxley says he personally assures that the company's internal controls are sound when he signs off on the financial statements. If he "cannot prove a negative about the lack of control problems in other areas of the company," he's not doing his job. Is the company too big for him to do his job? Well...
Quote:
Mike Mayo asks if JP Morgan is too big to succeed. "Has the firm reached a tipping point in terms of bigness or complexity where it is too difficult to manage?"
Sarbanes-Oxley is completey irrelevant for anyone other than the rank-and-file that have to fill out piles of paper work that end up just getting rubber-stamped anyways. Huge ****ing waste of legislation/regulation like everything else the government does in the name of "protecting the little guy." We were better off before it - at least Enron, WorldCom and Arthur Anderson were taken out. What's happened since the legislation was put in place?
I asked Bank of America, Citi, and JP Morgan Chase to provide answer to four sets of questions about their Libor practices.
1. Who makes the Libor submission for your bank? How many people involved? Who does the submitter report to? How high up in management does decision go? Is it reviewed before or after submitted to BBA? Who signs off on changes?
2. How is the submission calculated?
3. Has this procedure changed over time?
4. Is it under review following Barclays scandal?
Not one of the banks would provide the information requested. Bank of America and JPMorgan declined to comment. Citigroup did not return phone calls.
I wonder what incentives Turbo was talking about? I think the whole financial system is interested in one thing, moving the market when the mark favors them. I believe the markets we follow every day are moved in favor of the insiders by computer programs designed to move the market in a certain direction accumulating as little position in doing so as possible. I think there is a carrot and stick approach used in leading various stocks upward and a collapsing floor if the players in the market want to sell. I would hate to try to short this dog, knowing the street has computers that have your pain threshold programmed in and move the asks away from the market as it goes up. The only incentive I know is which side of the trade the bank is on. The only way I know to remove them is to fine the bank more than they could possibly make off the mis marks. That is, outside of handcuffs.
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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
