+++ 20. Juli 2012 +++
Bernanke Covers up for Geithner and Himself...
Federal Reserve Chairman Ben Bernanke had a (relatively) rough time in his session before the House Financial Services Committee on July 18. This time, the Congressmen could not block out the reality of financial breakdown, together with the factional moves for Glass-Steagall in Great Britain and the rigged interest rate scandal.
Why is it, Congressman Michael Capuana asked him, that so many people responsible for the fiscal crisis of 2008 “walked away scot free”, because the government took no action. His colleague, Brad Miller, wanted to know why Tim Geithner, then head of the New York Federal Reserve did not initiate any criminal prosecution. Bernanke, as usual, remained evasive, although calling the manipulation “unacceptable”.
He was also pressed on this issue as a criminal matter by Frank Lucas, a leader of the Agriculture Committee: "Press reports have indicated that the New York Fed first learned of possible rigging at LIBOR in 2008. However, when the CFTC announced the enforcement action and the $200 million fine against Barclay's in June, they said the interest rate rigging continued sporadically well into 2009. Chairman Bernanke, did anyone at the New York Fed inform the Federal Reserve in Washington, D.C., of potential rigging in 2008?"
The reference to the "New York Fed" clearly means Tim Geithner.
Maxine Waters, whom Barack Obama has desperately tried to drive out of office, suggested to Bernanke that he remove the LIBOR criminal banks from the Fed's list of primary dealers in government securities. Hers was also the only mention of HSBC money laundering.
Over the course of the hearing, Bernanke became visibly more nervous but maintained his characteristic evasiveness.
In his testimony before the Senate Banking Committee the day before, the Federal Reserve Chairman had as good as justified the LIBOR rigging by big banks and the indifference to it by Treasury Secretary Tim Geithner. He claimed that the Barclays Bank executives were "only", perhaps even "understandably", manipulating the world's most important interest rate to improve their bank's position, and not its derivatives profits.
And it got worse. In response to Sen. Jeff Merkeley, Bernanke claimed that the Fed only learned of bank traders blatantly demanding false LIBOR submissions which would maximize their derivatives bets at the expense of clients, "recently, from the CFTC's investigation." That investigation is more than four years old!
Merkeley then read some telephone transcripts showing clear fraud and manipulation of LIBORs by bankers for specific derivatives profits. "Does this constitute fraud? Does this fall into a criminal area?" he asked Bernanke, who answered, "It does seem to be so, yes."
And, incredibly, when Merkeley asked if the Federal Reserve didn't have the responsibility to alert customers, such as the municipalities making swaps and the people getting mortgages based on LIBOR, the Chairman said no. Why? Because "the financial press was full of stories. So I think there was a good bit of knowledge, at least among more sophisticated investors, about this problem."
~ deutsch + english ~
+++ 7. Mai 2013 +++
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+++ 7. Mai 2013 +++
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+++ 7. Mai 2013 +++
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