The Federal Reserve Bank of New York said Tuesday it had received word as early as 2007 from the British bank Barclays about problems with the benchmark interest rate that underpins much of global lending.
Barclays has admitted to rigging Libor, an interest rate that sets the standard for lending in a wide variety of markets — from corporate bonds to credit cards and some mortgages.
It's becoming increasingly clear that the LIBOR scandal is not Lehman Bros. redux but rather Bernie Madoff redux. Indeed, in some respects it's worse than the Madoff case, because at least some regulators were informed of the problems and did nothing and, worse yet, some may even have encouraged false reporting so as to maintain "confidence" during the financial crisis. In sum, the regulator failures are very much part of the real scandal here.
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