The Market Ticker – Senate Banking Committee: Utter Hypocrisy

The hypocrisy is dripping, yet the people of this nation refuse to rise.

HSBC Holdings Plc (HSBA)’s head of group compliance, David Bagley, told a Senate hearing he will step down amid charges the bank gave terrorists, drug cartels and criminals access to the U.S. financial system by failing to guard against money laundering.


Senior executives from HSBC, credited with providing millions of pages of documents for the investigation, expressed contrition and promised changes in response to the findings after Levin said the bank’s failings should provide sufficient cause for U.S. regulators to consider revoking its charter.

Ok, so money laundering for drug cartels and terrorists (bad things, natch) are cause for revoking a charter. I agree.

Now how about The Fed’s charter and all those who bilked people for years with LIeBOR?

Where’s Senator Levin’s faux outrage and threats to revoke charters leveled at all of the banks involved in that, including the Central Bank?

After all it is now a matter of record and admission that The Fed knew damn well that Libor submissions were at best dodgy and at worst outright fraudulent and not only did they fail to refer that information to anyone with law enforcement authority despite any fraud involving a bank being a criminal offense but in addition they didn’t inform anyone in the markets either so they could tell the scammers to pound sand!

The number of entities damaged as a consequence are almost impossible to enumerate — individuals, businesses, anyone with a dollar-denominated swap where Libor was part of it (e.g. your state or municipal government) and more. Determining exactly who got hosed and when is difficult but the fact of the matter is that since derivatives are zero-sum games for each dollar that one of these banks “made” through this manipulation someone got screwed in an equal amount.

Levin is the worst sort of jackass and our Congress is not only complicit, they’re active co-conspirators in these frauds by refusing to demand that all of these firms’ charters be revoked.

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