Wall Street scandals are often initially attributed to a single person or small group of people, typically less experienced traders or bankers, alleged to have committed a moral and professional sin behind the backs of their employers. After thorough investigations, the deceit often is found to have come from the top and not always limited to a single player.
The Libor rate-fixing scandal initially centered on traders at Barclays, then led to the ousting of Chief Executive Bob Diamond and then, after Barclays agreed to pay a $470 million fine, appeared to involve nearly a dozen other banks.
Among them, Royal Bank of Scotland’s participation seems particularly troubling. According to a lengthy Bloomberg article, RBS managers not only participated in rate fixing, but condoned it. The news service reported that managers at the Scottish bank instructed colleagues to submit false Libor claims to move the rate for the benefit of the firm, and also communicated with execs at other banks to help set a mutually-agreeable rate.
“This kind of activity was widespread in the industry,” David Greene, a senior partner at law firm Edwin Coe LLP in London, told Bloomberg. “A lot of the traders didn’t consider this behavior to be wrong.” No senior RBS managers have been suspended or fired, sources told Bloomberg.
While the fallout from this particular scandal is far from over, letting interested parties set terms of a market has never been a great idea. And, thus, Bloomberg itself has proposed a solution: It wants banks to use its new benchmark, BLIBOR, or the Bloomberg Interbank Offered Rate. Bloomberg's solution uses actual transactions in addition to existing methods to create a more accurate and independent measure of interbank lending rates–key figures that influence transactions around the world.
More Cuts (WSJ)
Bank of America Merrill Lynch is expected to cut as many as 40 members of its Asia Pacific global markets team to compensate for region-wide declines in stock and derivatives trading activity.
New Man on the Job (WSJ)
Set to book significant losses in 2012, Danish lender Vestjysk Bank has cut ties with Chief Executive Frank Kristensen, replacing him with Vagn Thorsager, former head of Aarhus Lokalbank.
No More Funny Business (Bloomberg)
Mortgage lenders are less than a week away from being forced to comply with more than 300 new service guidelines aimed to make the customer experience less painstaking, particularly for those undergoing foreclosure.
Avoiding the Slammer (Forbes)
One of the key witnesses who helped prosecutors cement their case against Raj Rajaratnam, the former hedge fund manager serving an 11-year prison term for insider trading, has avoided the same fate. Rajiv Goel, the former Intel exec who allegedly leaked information to Rajaratnam, has been sentenced to two years of probation after cooperating with prosecutors.
No Pulling Punches (NY Times)
Sheila Bair, a former banking regulator who chaired the Federal Deposit Insurance Corporation, blasts current Treasury Secretary Timothy Geithner in a newly-released book, suggesting he may have improperly acted in the interest of Citigroup during the Wall Street bailouts.
Glass Half Full (NY Times)
Job losses keep adding up, that’s for sure, but data suggests that employment numbers aren’t as depressing as those seen in other recent recessions.
Make That 15,870 Job Losses (eFinancialCareers)
Bank of America has hired roughly 130 small business bankers in Florida, despite announcing plans to cut 16,000 jobs within, primarily, its new mortgage and consumer banking businesses.
||Buzz Around the Office
Just Add Squid Ink Ketchup (OC Weekly)
If you’re traveling through Japan and looking for a taste of America, McDonald’s may not be the place for you. Meet the scary-looking black-bunned Kuro Burger.
List of the Day: First Week at Work
You only get one chance to make a first impression. Here’s how to make a good one during your first few days at a new job.
- Don’t be a know-it-all.
- When in doubt, listen rather than speak.
- Never say: “This is how we did it at my old company.”
(Source: The Daily Muse)