• Actual numbers: Fixed/Libor = $32,605mm; Fixed/FF = $1,035mm; Fixed/Other = $297mm; Libor/FF = $1,058mm; Libor/Other = $294mm. Total is $35,289mm of notional.


    New Reporting Requirements Let You Watch Swaps Trading In Fake-Real-Time, If That Sounds Like Something You’d Like

    What should we do with the new real-time swaps data depository? As of the new year, the CFTC is requiring all swaps dealers to report their swaps trades in real time, starting with rates and credit index trades, and here is the data depository with those (anonymized) reports. It’s … not particularly real-time! It’s not […]

    / Jan 4, 2013 at 6:24 PM
  • Financial violations, hurtling.


    Sometimes UBS Traders Manipulated Libor Just To Mess With Each Other

    The last of the UBS Libor settlements to come out was the U.S. one and it has some of the best quotes. There’s the yen swaps trader who said “I live and die by these libors, even dream about them.” There’s … I mean, there is the life and career of Bart Chilton, in toto; […]

    / Dec 19, 2012 at 3:50 PM
  • Circle of life.


    UBS Traders Convinced Brokers To Give Other Banks Fake Estimates Of Those Other Banks’ Fake Estimates Of Libor

    The UBS Libor settlements are really a garden of infinite delights; there are many semi-literate, fully criminal emails and IMs and you can read them here or here or here or here or in the FSA Final Notice. It is hard to pick a favorite thing but here’s a quirky one from the FSA: 58. […]

    / Dec 19, 2012 at 11:50 AM
  • Bob Diamond, now and forever


    Fines For Banks Who Made Up Numbers Seem To Be Made-Up Numbers

    I assume that there’s someone somewhere whose job it is to think about this, but the big Libor fine that appears to be in UBS’s future got me wondering: how do they decide how big these fines are supposed to be? In most fraud cases you can tot up how much someone stole and use […]

    / Dec 13, 2012 at 5:30 PM
  • ubsairship-260x156


    UBS Is Going To Have To Hold A Telethon To Pay Off Its Libor Fine

    UBS, Switzerland’s biggest bank, may be fined more than $1 billion by U.S. and U.K. regulators for trying to rig global interest rates, more than double the amount levied against Barclays Plc, according to a person familiar with the probe….The fine will likely be the largest against any bank levied by the U.S. and U.K. […]

    / Dec 13, 2012 at 10:55 AM
  • I was gonna give you more Bob Diamond, but Guido Ravoet of the European Banking Federation is surprisingly dapper and like stubble-goateed.


    Banks In Trouble For Making Up An Interest Rate In Response To Request For Made-Up Interest Rate

    The best way to read this Journal article about how a bunch of banks manipulated Euribor may be: while whistling the theme from The Great Escape: The goal was for Euribor to be manipulation-proof. … Instead of asking each bank how much it would cost it to borrow from a fellow bank, Euribor was based […]

    / Dec 10, 2012 at 3:22 PM
  • Bob-Diamond415


    Barclays Has Fired All The Employees Involved In Libor Manipulation That Didn’t Slip Out A Side Door And Beat Them To The Punch

    Barclays has fired five employees following its internal investigation of the rigging of Libor interest rates and disciplined another eight people, the head of its investment bank said on Wednesday. Rich Ricci, chief executive of Barclays’ corporate and investment banking, said “a lot” of the individuals identified in its internal probe had left the bank […]

    / Nov 29, 2012 at 11:41 AM
  • In bps, of course. Also those giant numbers in 2009 appear to be true?


    Banks Being Sued For Systematically Manipulating Libor Up While Also Systematically Manipulating It Down

    A probably important and genuinely difficult question is: all that Libor stuff, did it affect your mortgage? Probably important in that in expectation (1) you have a mortgage and (2) honestly you don’t really care about what banks do otherwise1 so you need to know how mad to get at them. Genuinely difficult at least […]

    / Oct 15, 2012 at 4:50 PM
  • News

    RBS Traders Have Yet To Find Anything They Don’t Like To Manipulate

    Just because their manipulation of Libor has gotten the most notice doesn’t mean it’s the only thing like to mess with. Don’t box them into that corner, like your one-trick ponies at Barclays.

    Royal Bank of Scotland suspended a trader for trying to rig the Singapore dollar swap offer rate, indicating employees may have sought to manipulate more than just Libor, two people briefed on the matter said. Senior trader Chong Wen Kuang was put on leave earlier this year for trying to rig the interest rate to benefit his trading position, said the people who asked not to be identified because the bank is probing his actions. He is the first RBS employee to be suspended or fired for attempting to rig a benchmark other than the London interbank offered rate, one of the people said.

    RBS Said To Suspend Trader Of Interest Rate Rigging [RBS]
    Earlier: RBS Trader Whose Instant Messages Clearly Show Him (Allegedly) Engaging In Libor Manipulation Not Going Down Without A Fight

    / Oct 5, 2012 at 3:43 PM


    It’s The Beginning Of The End For Danish Kroner Libor

    Why would you want to be a Libor bank? It’s unpaid work, in that every day you need to get on the phone to Reuters and say where you can borrow across 150 tenors and currencies in which you mostly don’t borrow, which one assumes taxes the imagination. And there’s potential badness, though the specifics […]

    / Sep 28, 2012 at 11:31 AM
  • News

    RBS Trader Whose Instant Messages Clearly Show Him (Allegedly) Engaging In Libor Manipulation Not Going Down Without A Fight

    One thing that most people probably agree on is that having their instant messages, e-mails, and phone calls end up court would be cause for at least a little embarrassment. Everyone’s thrown in an emoticon they aren’t proud of, some of us have used company time to chat with significant others about undergarments, and the vast majority of workers have spent a not insignificant amount of the workday talking shit about their superiors. Of course, the humiliation gets ratcheted up a notch in the case of people who ‘haha’ (and in extreme circumstances “hahahah’) their own jokes* which, just for example, involve habitual Libor manipulation. Tan Chi Min knows what we’re talking about:

    “Nice Libor,” Tan said in an April 2, 2008, instant message with traders including Neil Danziger, who also was fired by RBS, and David Pieri. “Our six-month fixing moved the entire fixing, hahahah.”

    And while having such an exchange become public would be tremendously awkward for most, you know what’s really ‘hahaha’ about this whole thing is that 1) Tan was the one who wanted people to read the above, which was submitted as part of a 231-page affidavit earlier this month and 2) He’s trying to use it as evidence that he didn’t deserve to be fired.

    The conversations among traders at RBS and firms including Deutsche Bank AG illustrate how the risk of abuse was embedded in the process for setting Libor, the benchmark for more than $300 trillion of securities worldwide……Tan, the bank’s former Singapore-based head of delta trading for Asia, [is] suing Britain’s third-biggest lender by assets for wrongful dismissal after being fired last year for allegedly trying to manipulate the London interbank offered rate, or Libor.

    Tan, who ‘allegedly‘ tried to manipulate the London interbank offered rate, also included this conversations as part of his defense:

    “What’s the call on Libor,” Jezri Mohideen, then the bank’s head of yen products in Singapore, asked Danziger in an Aug. 21, 2007, chat.

    “Where would you like it, Libor that is,” Danziger asked, according to a transcript included in Tan’s filings.

    “Mixed feelings, but mostly I’d like it all lower so the world starts to make a little sense,” another trader responded.

    “The whole HF world will be kissing you instead of calling me if Libor move lower,” Tan said, referring to hedge funds.

    “OK, I will move the curve down 1 basis point, maybe more if I can,” Danziger replied.

    And this:

    In another conversation on March 27, 2008, Tan called for RBS to raise its Libor submission, saying an earlier lower figure the bank submitted may have cost his team 200,000 pounds.

    “We need to bump it way up high, highest among all if possible,” Tan said.

    Tan also asked for a high submission in an Aug. 20, 2007, instant message to Scott Nygaard, global head of RBS’s treasury markets in London.

    “We want high fix in 3s,” Tan said in the message. “Neil is the one setting the yen Libor in London now and for this week and next.”

    Also this:

    “It’s just amazing how Libor fixing can make you that much money or lose if opposite,” Tan said on an Aug. 19, 2007, conversation with traders at other banks, including Deutsche Bank’s Mark Wong. “It’s a cartel now in London.”

    And this philosophical one, for good measure:

    “This whole process would make banks pull out of Libor fixing,” Tan said in a May 16, 2011, chat with money markets trader Andrew Smoler. “Question is what is illegal? If making money if bank fix it to suits its own books are illegal… then no point fixing it right? Cuz there will be days when we will def make money fixing it.”

    The defense rests.

    RBS Instant Messages Show Libor Rates Skewed for Traders [Bloomberg]

    *Although actually people who do this probably don’t even have the good sense to be ashamed of themselves.

    / Sep 26, 2012 at 12:42 PM
  • News

    Libor Manipulating RBS Traders Were Apparently Cool With Libor Manipulation

    It’s hard to see what is news about the latest Libor news but it exists so let’s paste it here: Royal Bank of Scotland Group Plc managers condoned and participated in the manipulation of global interest rates, indicating that wrongdoing extended beyond the four traders the bank has fired. In an instant-message conversation in late […]

    / Sep 25, 2012 at 11:17 AM
  • I recommend reading this chart as a pure abstraction, like "height of blue bars for interest rate swaps."


    “Investors Expect Libor To Be Replaced Within Five Years,” Enter Five-Year Libor Swaps Anyway

    It’s time to play survey results versus revealed preferences. First: A key interest rate for more than $500 trillion of securities worldwide will be replaced by a benchmark subject to greater government control, according to a plurality of global investors. Forty-four percent of those responding to a quarterly Bloomberg Global Poll said the London interbank […]

    / Sep 7, 2012 at 4:01 PM
  • It's quite hard to get a visual for "Libor," so Bob Diamond's puzzled face is a useful metonymy and I will probably use it for all past and future Libor-related matters though eventually everyone will forget who he was. See also: the cows.


    Not Everything Is Libor

    It’s been a while since we checked in with the infinity thrillion dollars of Libor lawsuits, but the Journal has a good roundup today and, yeah, eep, this is sort of interesting: Firms facing the biggest potential payouts, according to Morgan Stanley, based on the financial business they do rather than their assumed culpability, include […]

    / Aug 27, 2012 at 2:02 PM
  • Hugely embarrassing: this post used to contain the logo for the wrong Berkshire Bank. Sorry!


    Jealous Non-Libor-Panel Banks Want Libor Lawsuits Too

    Apparently a lot of law school graduates are unemployed and starving so as a public service I figured I’d clue them in to an easy and lucrative line of business open to any self-starter with a law degree: (1) Find a description of how banks manipulated Libor and it was bad – this complaint will […]

    / Jul 30, 2012 at 2:28 PM
  • New rule: every financial regulator, bank CEO, whatever, when they're sworn in, they have to pose for two pictures, one doing "thiiiis small" and the other doing "the fish was thiiiiiis big."


    Tim Geithner Dealt With Libor Manipulation By Writing Strongly Worded Letters And Then Lending Billions Of Dollars At Libor-Based Rates

    Tim Geithner had a nice chat with Congress about Libor in a theoretically unrelated hearing today, and since Congressional hearings are mostly about restating everyone’s pre-existing prejudices I figured I’d lay out my Libor hobbyhorses: Nobody really has ever been all that troubled by the fact that banks manipulated Libor to make themselves look like […]

    / Jul 25, 2012 at 4:55 PM
  • You can't beat buddy-CEO pictures.

    Banks, News

    Deutsche Bank Won’t Let A Little Libor Manipulation Or Earnings Miss Slow It Down

    Deutsche Bank had two weird little bits of gun-jumping news today, one good(ish), one bad (just bad). The good news is that Deutsche Bank has decided that it wasn’t manipulating Libor too much: A Deutsche Bank internal probe has found that two of its former traders may have been involved in colluding to manipulate global […]

    / Jul 24, 2012 at 4:59 PM


    The City Of Baltimore Didn’t Need To Subsidize Your Mortgage Through Libor

    We talked the other day about municipalities and the Libor shenanigans. Quick recap: 1) Municipalities wanted long-term fixed-rate debt. 2) They got it indirectly by selling long-term floating-rate debt and buying interest rate swaps from banks. 3) At first, this was cheaper than issuing fixed-rate debt.* 4) Later, though, sometimes it turned out to be […]

    / Jul 13, 2012 at 6:11 PM
  • News

    Eliot Spitzer Is Willing To Suspend Judgment Before Determining Whether Or Not The New York Fed Let Barclays Molest Young Boys

    Maria Bartiromo: Tim Geithner apparently flagged the problem 5 years ago. Why didn’t he do more about this? He basically called the Bank of England and said he was worried about the approach in terms of Libor, that they needed to change it. Did he do enough?

    Eliot Spitzer: Look I think it would be preemptory to say one way or the other. This is something that needs an awful lot of examination. I think the fact that he knew in ’07, sent a memo in ’08 is only the first layer of inquiry. Did he follow up on it? Libor, as everyone who watches CNBC knows, is the heart and soul, it is the blood stream of the financial system. If anyone is rigging it or playing games with it then you must follow up. Anybody who is in the regulatory position that Tim Geithner was in, in my view the most important bank regulatory position in the world, how do you not follow up and say wait a minute guys what have you done? So it’s unclear, and I hate to use this metaphor perhaps but was this the sort of memo that was being sent at Penn State where you just kind of brush it aside or was it really and effort to do something?

    MB: Oh god…

    ES:…This bears an awful lot of inquiry. Because it goes to the very real question of whether the NY Fed did not fulfill its fundamental function to ensure the soundest [and] security of the balance sheets of the banks all the way through the period leading up to the crisis. Is this one piece of evidence that runs contrary to that or one piece of evidence that supports it? We don’t know yet.

    MB: What a comparison.

    ES: Well let me tell you Maria, unfortunately when you see memos at the top being written like that, you never know, you have to ask the question, what preceded it, what came after it, otherwise you don’t understand the texture of what was being done by that senior person.

    Spitzer Talks Wall Street [CNBC]

    / Jul 13, 2012 at 5:49 PM
  • Why yes I think I have heard this one before


    “Same Old Boring Story”

    The Barclibor scandal waits for no man; the municipal borrowers have had their day in the sun and now we move on to the New York Fed’s disclosures about what it knew when. Short version: everything, immediately! Here is a thing that a Barclays trader told a NY Fed economist in April 2008 (omitting the […]

    / Jul 13, 2012 at 2:04 PM
  • News

    Libor Manipulating Banks Used Baltimore’s Tax Dollars To Help Pay Off Your Mortgage, Or Something

    There is a line forming to the left for people to beat up on Libor-manipulating banks, and it’s a long line so your beating time is limited and you have to make the most of it if you want anyone to care. Today’s the day for U.S. municipal borrowers. How’d they do? The municipalities are […]

    / Jul 11, 2012 at 6:31 PM
  • Please don't leave us Bob

    LIBOR, News

    When You’ve Got A Global Financial Crisis To Worry About, A Few Trillion Dollars Of Fraud Don’t Seem Like That Big A Deal

    The Libor scandal presents a whole range of questions from the very micro “how much did I lose on my mortgage”* through the micro yet fantastically large “what kind of total damages are floating around in lawsuits” past the pseudo-philosophical “how can I ever trust the financial system again”** all the way up to the […]

    / Jul 10, 2012 at 11:28 AM
  • News

    Banks Defend Against Libor Lawsuits By Asking “Libor? Who Uses Libor, Anyway?”

    It’s no surprise that more Liborneriness is coming to a bank near you; with Barclays and UBS already pretty much having admitted wide-ranging Libor manipulation and Deutsche Bank seeming to be next up for a roasting. Maybe some people will go to jail, and certainly some more banks will pay fines, but also certainly those […]

    / Jul 6, 2012 at 6:05 PM
  • Another for the why-would-you-ever-make-this-face-on-camera file

    Barclays, News

    Who Should Be Sharpening Their Pitchforks For Barclays?

    The Barclibor scandal doesn’t seem to be going away, so it might be productive to try to figure out how much outrage is the right amount of outrage and express it in dollars. You can be all “what a bunch of crooks, with the emails, and whatnot” and sure, but there are lots of crooks […]

    / Jul 5, 2012 at 3:37 PM
  • And now we just draw in the arrow for "fraud," and ... done.


    Libor Was Whatever Barclays Wanted It To Be

    Good lord are these Barclays settlements juicy. Basically every day for two years one Barclays trader or another would send an email to their Libor submitter saying “hey let’s commit crimes, tons of crimes, hahahaha” and then they did. In pathetically colorful language: Trader C requested low one month and three month US dollar LIBOR […]

    / Jun 27, 2012 at 12:31 PM
  • News

    Libor Can Be Whatever You Want It To Be

    There is much to ponder in the continuing saga of Libor but this sounds like an excuse: The U.K. bankers and regulators charged with reviewing Libor in the wake of regulatory probes are resisting calls to overhaul the rate because structural changes risk invalidating trillions of dollars of contracts. … [They] won’t propose structural changes […]

    / Jun 26, 2012 at 6:36 PM
  • Banks

    Libor Epistemology

    My favorite thing about the Libor scandal is that it’s an obvious outgrowth of what Libor is. Like: (1) Banks signed a kajillion contracts with people to the effect of “we will [lend | swap | whatever] you some money at Libor + xxx%.”* (2) Libor is a number that a private data provider calculates […]

    / Mar 5, 2012 at 7:47 PM
  • sergio ermotti 17feb12


    Banks Were Asked If They Would Prefer To Make More Money Or Less Money, Chose More Money

    One kind of obvious thing about financial markets is that you can’t just call everyone into a room and tell them, “look, guys, just be honest about the price that you would pay / receive for Thing X.” This is because financial industry traders are degenerate lying scumbags. No, wait, that’s not right. This is because if everyone just told each other their reserve prices then it would be really hard for them to make any money trading and so we, like, wouldn’t have a financial system. So you have things like anonymous execution on stock exchanges and dark pools and, um, lying scumbag traders. And that allows you to have profitable trading.

    Of course you have to put some limits on the lying scumbaggery: you can’t tell people you’re investing their money while really blowing it on hookers, and I guess now you can’t sell someone synthetic CDOs without telling them who was on the other side. But a little fudging around the edges about the price you’re willing to pay or receive – or the price you could pay or receive elsewhere – is kind of at the heart of what trading is.

    So in a sense the amazing thing about the Libor scandal is that people are amazed by it. A quick recap:

    / Feb 17, 2012 at 2:27 PM

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