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How Should Have NY Fed Have Handled Libor Scandal?

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    Former bank regulator William K. Black on the expanding Libor scandal.

  • Duration 4:52
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Expanding its investigation into the Libor rate manipulation scandals -- How big is this -- -- scandal going to get we have before bank regulator who says it is the biggest antitrust violation we have ever seen joining us now is William.

Black good to see again bill let me just say one thing that that first of all if any -- -- this comes from a judge -- particularly interested -- these affairs.

If any bank including by the way the New York fed.

Gave knowingly false data to those who calculate -- heard about -- the purpose or the outcome that bank violated federal law and so but at least that much let's get that much to -- on the record.

As to what is and what isn't illegal but we just got these transcripts.

Between Barkley is an -- police official.

And a New York Central Bank official New York fed official and let's just put that up on the screen to get your reaction to it.

First of all the unnamed bark lease trader says so we know that were not posting an honest Libor admitted that it's not an honest -- where the New York fed official.

A woman named Fabio all our revenue -- says okay.

The Barclays trader says and yet and yet we are doing yet because if we didn't do it.

It draws Obama on wanted attention on ourselves the Fed official the New York fed official says okay.

I got you debt now could this be considered collusion between the New York fed the park police official.

Yes but it can be the type of person someone says it in a conversation as well okay I hear that okay here that.

And then they run and tell their boss.

Hey this Barclays official just admitted to a felony we need to shut down this whole like -- across that this was beverage business.

-- years ago though bill if there was any indications they were breaking the law wouldn't they've had an indictment before that before now.

Well.

Here's what happened this is -- -- because the head of the Bank of England tried to defend himself said.

Well but gosh I didn't think any of this could be fraud idling learned -- a month ago.

And that it can't be -- case of fraud because it took the regulators three years to investigate it -- why did it take three years.

Because when the commodities future trading commission.

Tried to get documents from Barclays park police refused in the British but.

Authorities.

Did not compel Barkley is for dubbed over a year to turn over the -- -- see that leads to this question.

I know everybody wants to jump all over the New York fed in the Federal Reserve unity into the British banking association is the one that oversees -- -- has all this time.

What could we do across the popped.

-- we could do a lot.

But you wouldn't know what if you are listening to the General Counsel of the Fed who -- Fuld.

That congress in a closed session that got -- it the fact.

We had no authority at the Fed.

Didn't deal with the -- fraud because it didn't raise safety and soundness concerns.

So here's my quiz to see whether you're qualified to be a financial regulator can't Bernanke and Geithner already failed it.

When you are told that there is a massive felony what are their first two things you do.

One that you stop that and to you make a criminal referral to the Justice Department.

And they didn't do either of those things all dust.

-- I suggest to get -- else bill does that not suggest you've been that they didn't think there was anything criminal either they were part of our criminal -- -- behavior or they didn't think there was criminal activity going on.

-- it suggests to me that they were up already early into the cover up.

And lots of things were being done we change the accounting rules for example anyway that's is trying -- -- and it just you just uses you just use the word cover up.

That suggest in and of itself criminal activity that's a strong work.

It certainly does but in it's it's really hard to make -- case against the federal official unless they get paid.

And there's no indication that they got paid so I don't think there's any serious criminal case with -- regard to the fat.

But they're certainly going to be a defense Barclays is already set -- That you can't come after us because the Bank of England told us she.

On the rate to make us look better that's the cover up processing the cover up was about the true financial condition.

Of the banks while the probe is expanding to more banks beyond Barclays were watching it all -- Black thank you for joining us thanks bill thank you.

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