You're watching...
CFTC Commissioner Bart Chilton on the fine against Barclays for trying to manipulate Libor rates.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Please settling with regulators today paying a total of 400 yeah.
Four billion dollars.
For trying to manipulate interest rates we have the guy behind the big investigation Bart Chilton one of our favorite CFTC commissioner.
Joining us now -- wonderful to see so let me just get this straight what they were doing it.
They were kind of faking their numbers the -- war that London Interbank offered rate is set by putting together bunch of numbers and they were faking -- is that right.
Yet that that that's right Dave.
How they do the average is that they caught an Olympic average they have all the mega banks -- sixteen album.
And they all put it put the numbers and a pot and the numbers are.
What their cost of borrowing is sold what it does it cost Barkley is to borrow -- don't cheap money.
And they put that number out and they throw the top hide for out and the top low for out and it's an average of those.
The remaining eight.
And they tried to -- those numbers.
Not because they were that it wanted to make them look better for internal purposes but because they wanted -- better for their trading apparatus they wanted to better for the bank's own.
Trading self a legal we've caught -- and it's amazing how they did this stuff.
Well you caught them through some email evidence and the email evidence was coming from some traders who were saying.
Basically having -- dude can you help me out with the rate this time around here's what I need and in essence the response was I got your back.
So to speak emeritus.
-- and in essence this is please go for five point 36 -- again tomorrow very long thanks.
That was something that you found now.
They settle for Barclays yet done a big boys are -- big boy whatever these traders are saying -- but buying.
Is this just a case of Barclays was the only one doing it or is this systemic is this going through a lot of banks.
-- -- things -- one yet they were duty each other and that's I these these guys the traders were almost.
Up barking orders at what we called a civil matters that people that work both -- but the numbers for and what -- -- almost like they were at a drive through at a fast food you know all have a number five.
And this -- -- that people that were deluding work a sexually saying you want Fries with that anything else I can do for -- So was a big problem.
With regard to whether or not it's going on and other places that's obviously a natural progression of the question -- where we've looked at that but I I can't tell you right now whether or not the probe is continuing just not at liberty to say unfortunately.
Now part some folks might look at business say that banks do this all the time visited their bunch of crooks and -- -- it.
This stuff happens but it does boil down into affecting our every day lives does it -- it does yeah actually -- this -- -- the boring rates that we have to.
Use yet you know a lot of times and and not necessarily to your audience day but it mean.
Libor sort of sounds like gobbledygook to people but let me tell you what it is it is the it is the benchmark interest rate in the entire world on the planet.
And it impacts the interest rate and everybody pays for their mortgages further credit cards for a car loan or even a student -- so it's hugely important impacting every day people.
And that's what they were tampering with and that's why we have such date -- -- Penalty here and remedial measures to ensure that they don't do it again.
While mr.
commissioner about the question becomes -- what measures do you take to make sure that these guys aren't gaming the system for their own gain.
What what one I think that this this penalty Liz is not it's not just the cost of doing business I mean it's nearly half billion bucks it's it's significant.
But to we put up firewalls between the guys that -- people -- duty each other the between the traders and -- -- matters we put up firewall so that they can't talk and they can't influence that inappropriately.
Or also requiring additional supervision had training.
And third party audits and reports to us we're gonna be on these guys like white on rice believe you me.
You know if you have regulators that are tough on enforcement you got most of the rules that you need you just need to get the guys the -- suffered during the wild west in Chicago.
To clamp down and these guys -- congratulations thank you very much reporting by way from Little Rock, Arkansas thank you.
-- -- nerve center of the financial world energy -- Right.
