HuffPo writes: Warren Buffett said on CNBC on Thursday
morning that the Libor scandal is a "big deal." Everyone should be paying attention to the
Libor scandal, at least according to Warren Buffett.
Big banks have come under fire following allegations that
many profited off the manipulation of Libor, a key interbank lending rate that
acts as a benchmark for interest rates around the world. The first bank to
admit wrongdoing, Barclays, agreed to pay more than $450 million last month to
settle claims it manipulated the rate. The 16 banks under investigation by
governments in Europe, the U.S., and Japan for allegedly rigging Libor include
Bank of America, JPMorgan Chase, and Citigroup.
Rolling Stone's Matt Taibbi recently said it was likely that
most or all of these banks were guilty of rigging Libor, since 16 banks help
set the Libor rate every day. On CNBC, Buffett called Libor "the base rate
for the whole world."
"Everything is tied in [to Libor]," Buffett said.
"The idea that a bunch of traders can start e-mailing each other or
phoning each other and play around with that rate is an important thing, and it
is not good for the system." Buffett
said that unwinding the collateral damage from the alleged Libor rate-rigging
will not be easy because millions of contracts are based on Libor….
No comments:
Post a Comment