- Baltimore has sued, and it isn't clear they are very sitautionally different from every debtor anywhere, so it probably won't just be Baltimore ... but it may be the case that these lawsuits are too big to succeed.
- This Planet Money podcast is a very good overview, for those of you who like things auditory.
- Professor Bainbridge is worried that the regulatory response will be to bring back Glass-Steagal. It's certainly possible, but it would have been so easy to fix this by asking for evidence of trades, rather than self-reporting the rate at which British banks could borrow from one another. That rule will be passed (by agencies) within minutes. I see the future Anti-LIBOR-Fixing Statute as one that will involve jockeying between the CFTC and SEC for additional regulatory powers, inter alia. Anyway, here's Bainbridge:
Just as there is no evidence that allowing commercial and investment banking to co-exist within the same firm was causally linked to the bank failures of the 1930s, there is no evidence--zero, nada, zilch--that it contributed to the LIBOR scandal.
The LIBOR scandal was caused by roque employees and complicit regulators (the latter being a fact that ought to give even liberal fans of big government pause). It is a form of price-fixing. As such, no one has yet identified any misconduct that is not already illegal under existing laws.
The answer thus is not to bring back Glass-Steagall.
The answer is to enforce the laws that are already on the books.
And, while we're at it, to ask USA and UK regulators how they--once again (see, e.g., Bernie Madoff)-- managed to miss a huge criminal enterprise taking place right under their noses.
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