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Saturday, 8 September 2012

Hang on a 'mo

A couple of weeks ago, the ex-management team at Barclays 'fessed up to the NY Banking regulator and ponied up half a billion or so of shareholders' funds to settle a complaint that Barclays had misreported LI(BOR.  OK, everybody knows that misreporting LIBOR was a bad thing, and the culprits should be sacked and punished, but nobody really knows the scale of the misdemeanour, and as LIBOR was being under-reported, borrowers (who are the ones we are supposed to like, kids), wouldn't have been hit at all, although cash depositors and swaps traders might have (but we certainly don't like the latter).

But this week, we hear that RBS is negotiating to settle as well.  Now, hang about.  Who says the costs of fixing LIBOR (the LONDON interbank offered rate) is anything to do with NY regulators.  The whole idea behind the London interbank market was that it was outside US (and French, German etc) regulatory control, and there is no evidence that there has been any cost to any US person as a result.

But worse than that.  As a joint shareholder through a 90% government interest in RBS, why is my money being used to pay for the misdeeds of the bank before my taxes bailed it out.  And why is my money being paid in to the US tax coffers for an act that took place in London?

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