First of all one must understand what the "Libor" rate really is. LIBOR = London Inter Bank Offer Rate. It is an interest rate which is fixed once every day at 11am London Time by Banks operating on the London Money Market !!!
LIBOR is in fact the "Overnight" interest rate for short term loans between Banks which enables Banks to "Window Dress" their accounts when they need to reduce temporarily the imbalance of "too high" outstanding loans, given or received !!!
The Scandal which has just erupted concerning the LIBOR rate will be more fully explained during the coming days !!! To-day it is too early to draw any "conclusions".
What appears to be the case is that numerous people in the "know", both Politicians and Bankers at the highest levels, were well aware of "misdeeds" where rules were "conveniently bent" !!! In fact when rules are bent, someone somewhere could be expected to be profiting and to be making money either for himself or his company, but at the expense of others !!!
The real scandal of the matter is that these "irregularities started not just recently but at least five years ago when the Socialists were in power under the guidance of Blair and Brown !!! This will also come to the fore shortly !!!
What now needs to be done ? It is quite clear that legislation must be drafted to confront and limit City Bankers and Highflyers who are tempted to flout the rules.
In particular, all contracts concerning exceptional "remuneration" beyond the normal salaries of Bank Directors (and directors in other industries) should be officially filed and not be authorized as payable before the next AGM of the company concerned !!!
Directors who commit "criminal" acts should be made to understand that they risk being sent for trial !!!
.
No comments:
Post a Comment