New York Fed’s Fake Borrowing Rates Raise Ghosts of Libor’s Fake Rates

by Pam Martens and Russ Martens
Wall Street on Parade

When it comes to Wall Street’s mindset, the thinking is that it’s legal if you can get away with it. That mindset seems to have captured the Federal Reserve Bank of New York which secretly pumped trillions of dollars into insolvent banks in violation of its statutory mandate during the financial crisis; is alleged to have fired a bank examiner for refusing to alter her negative examination of Goldman Sachs; and failed to investigate a litany of crimes to which it was made aware. (See U.S. Senate Tries Public Shaming of New York Fed President Dudley.)

One of the crimes that the New York Fed failed to bring to the attention of U.S. law enforcement was mega banks cheating on the borrowing rates that they were reporting as their London InterBank Offered Rate or Libor, a benchmark interest rate used globally to settle derivative trades and used as a reference rate to set mortgage rates, credit card rates, student loans and other consumer loans.

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