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Somebody who says we've really only reached the tip of the iceberg with this scandal Robert eyes and vice is the managing director and chief.
Monetary economist at a place called Cumberland advisors but.
He was the former director of research at the Atlanta fed could to have you Robert let's get right to it.
As you can tell that okay so there's some some indications that the Fed had received anecdotal evidence that may be there were problems with the -- certain banks were submitting.
Their idea what the interest rate should be for how Libor -- London Interbank offered rate is compiled sixteen banks.
How do you think that -- how the New York fed knew about this sort of Federal Reserve's.
Well I think it's pretty clear that they had received a notification that there were some questionable activities going on in that market.
This is beginning to look like a financial octopus -- Tentacles reaching an all different directions.
Both within the United States and the UK yen and other places as well it's just the tip of the iceberg as you said.
The -- business systems so.
About the they were lying in the beginning to boost profits prior to the financial crisis and -- the financial crisis it was more case of trying to hide how much financial stress.
They want on -- doesn't matter what the scenario is it's just basically relying on what they tell he was -- right.
That that's just one dimension of the issue and of course took a break to corporate culture and what the behavior was.
There was the emails and that -- cited in the after they report for example.
-- show there was a cowboy type mentality that was our operatives they are and you know these kids these institutions were trading information -- request that each -- this is just just part of it.
Robert Ed do you think that it's possible that the New York fed to look the other way when it got these comments or or is this something that they should have jumped all over -- said.
Let's look into it right now.
Well I think there's a couple dimensions to it first of all we know that they did some studies some of the recent research people actually published.
Some -- -- and so they didn't totally sweep it under the rug.
I think there's an interest in connection there because of the primary dealers and the fact that.
They weren't so it surveilling the primary dealers -- stop doing that in 1992.
And that raises lots of questions -- doubt.
How much of trust you really should be putting in these institutions at this point.
Could US banks be caught up in this.
Well I think there's some chance that there could be some involvement we just don't know yet.
-- there were sixteen banks that contributed to Libor and I -- but at some what we know here in the US are currently being investigated right now here they are on the screen Citigroup we know JPMorgan was being looked out it look I mean this is obviously big.
I was hearing that took the former head of the SEC Arthur Levitt said this is a very serious and huge issue but again let me push -- here.
The British banking association was the one who got these submissions isn't -- responsibility ultimately with them -- not us.
Well I think.
Clearly the big -- of the big brunt of the the problem but at the same time.
When you're concerned about the integrity of the entire financial system and that.
The number of volume of credits that are dependent upon having true prices and correct prices that were priced off the Libor.
This is not just something you can push off on someone else I think.
All the regulators.
Are really responsible to some extent and had an obligation to be sure that those prices were correct.
And they you know going to be on the fire no doubt brother dies and vice thank you so much for talking to us about -- the -- --