This transcript is automatically generated
And we are joined by none other than Republican Scott Garrett of New Jersey.
We just saw grilling guy needs and Democrat Stephen Lynch of Massachusetts who just wrapped up his -- with the Treasury Secretary.
Congressman guarantee you first sir did you get the answers you wanted from the Treasury Secretary.
Unfortunately you know our system works that they only have five minutes to lay out of the -- lay out the question and then there.
Get an answer and the secretaries did good on extending his answers over that period of time so no unfortunately we really didn't hear what we wanted to hear.
Right okay for your democratic counterpart congressman.
What are you hoping to get out of these hearings are we look at the fix -- we look at that punish.
Well I I think both I think that there are some people who need to be held accountable.
We also have a widening.
Scandal if you will.
-- 450 million dollar settlement only was with respect to Bart police.
And we think there may be as many as sixteen banks that had been involved in this conduct so.
I think that Republicans and Democrats are gonna have to work together to make sure we get to the bottom of us.
Did -- congressman Garrett it seems to me that in previous manipulation scandals have backed -- a hundred year view on the hunt Brothers tried them.
-- many -- -- there's profit motive but wasn't this manipulation and kind of low ball on the rates that you're actually paying each other.
Wasn't -- based more on panic and fear and trying to stop a run on banks does that make any difference to congress.
Well I think there's a mix of both in the situation when it was occurring.
Was that sentiment that was there to prevent a run on it but also to make their banks -- that they were in a better posture than they than they actually work.
That's one to prevent Iran but it's also make themselves and more -- but into the that -- that they weren't they have to take on more capital and the other side effects as well sort of profit is an element here absolutely -- But congressman let you know what congress is they're protect the people.
The people actually had lower borrowing cost right as a result of this.
Manipulation and that the banks.
We're declaring the race to be lower because I didn't wanna start panic if the people knew the -- that rate for super high there'd be a run on the banks so American consumers -- -- why why -- going after.
Well not I'll -- you get a little bit wrong.
The banks now are investing two thirds of them money into trading operations.
Solve the lower Libor.
Yes it did it did hurt the lending.
Aspects of their portfolio.
But these banks are doing two thirds of their business on on trades so Libor help them the profit motive was still there.
Yes it did hurt their -- portfolios because the rates were lower.
But on all these trades that they're doing and actually enhance fit their profitability and can't enhance their trading positions -- This is where we have to differentiate between the lending function fan and -- trading function -- these back.
Department congress religion to all of you sir are you saying that the main purpose the banks got together on this was -- they wanted to make profitable trades or -- they terrified at the meltdown in trying to stop more of a meltdown.
It was all about the trades if you read the mammals that that came out in the case against -- please.
Every single request -- -- lower Libor rates was made by a trader there were no calls.
Lower Libor are -- Libor by lenders these were all traders sold.
The trading aspect of this BP this is to boost there there -- here at least bonuses and to and to bring you -- you know to enhance the performance of these trade.
OK thank god congressman Garrett Garrett sound like part of what congress is doing years.
Demonizing trading how dare they trade for a profit.
I mean but think back to LA was a terrible horrible meltdown.
I find it very hard to believe that there was manipulation aimed at actual profiteering -- are you on the side of Congressman Lynch on that you feel like this is all about the the prop trading and not about fear.
-- as -- -- in my opening comment I think there's an element of both but I think there's some on the profit side and also on the on the on the -- side of the question but that is besides the point the regulators responsibility here is to provide for the transparency.
And accuracy in the reporting of the data and that and that's it.
You know these same requirements on the corporate sector that the follow all the time is on transparency.
Why should we have -- over here in the banking sector whether -- profit mart profit interest or around.
And the regulators failed to do their job.
You know we can't rely upon the information that's coming out from the banks don't point the finger at London to -- the finger over those regulators over here point the finger back here at home and get the rules right.
All right the regulators failed to do their job and we thank you Congressman Lynch and congressman here for being -- -- -- talk more about it.