Geithner Doctrine Lives on in Libor Scandal –

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Geithner doctrine lives on in Libor scandal –

ithner has resigned as US Treasury secretary, it is time to survey the damage wrought from four years of his approach to the financial crisis. The “Geithner doctrine” made the preservation of the largest banks, no matter the consequences, a top priority of the US government. Aside from moral hazard, it has also meant the perversion of the US criminal justice system. The US faces a two-tiered system of justice that, if left unchecked by the incoming Treasury and regulatory teams, all but assures more excessive risk-taking, more crime and more crises.

The recent parade of banking scandals, such as the manipulation of Libor rates by Barclays, Royal Bank of Scotland and other major banks, can be traced back to the lax system of regulation before the financial crisis – and the weak response once disaster struck.

Take the response of the New York Federal Reserve to Barclays’ admission in 2008 that it was submitting false Libor rates and was not alone in doing so. Mr Geithner’s response was to in effect bury the tip. He sent a memo to the Bank of England suggesting some changes to the rate-setting process and then convened a meeting of regulators where he reportedly described only the risk but not the actual manipulation of the rate. He then put the government imprimatur on the rate via bailout programmes. His inaction helped permit a global crime to continue for another year.

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2 Responses to “Geithner Doctrine Lives on in Libor Scandal –”
  1. Sarah says:

    Geithner needs years of public scorn and derision, even if it is for being in the wrong place at the wrong time. Consider that not one financial executive has ever had to face he music for established criminality. His treatment of homeowners is equal to premeditated torture. So, as a symbolic gesture, he should truly serve as the fall guy for the FIRE sector and be prosecuted in the public sphere instead of championed by the scum-bag corporate press as a guy “who had ta’ do what needed to be done’. Only a degenerate sociopath would see to it that more Americans are made homeless.
    Timmy admitted he knew the Banksters were bailed out with rigged libor rates, for example That cost every single one of us, therefore we should ask for the immediate seizure of his DC area living quarters, followed by a lifetime ban from working in finance in any capacity in the future.

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