No One Wants to be the Second Barclays Bank

Apparently the shitstorm that engulfed Barclays Bank after it paid a big fine for rigging LIBOR rates has put the fear of God into everyone else on Wall Street. So now they’re hoping to avoid the spotlight by teaming up to pay a gigantic joint settlement and hoping that no one pays too much attention to the individual banks who are walking the plank:

The sources told Reuters that none of the banks involved now want to be second in line for fear that they will get similarly hostile treatment from politicians and the public. Bank discussions about a group settlement initially took place before the Barclays agreement, and picked back up in the aftermath.

It is unclear which banks are involved in the potential settlement talks. More than a dozen banks are being investigated in the scandal, including Citigroup, HSBC, Deutsche Bank and JPMorgan Chase. They all declined to comment.

….While Barclays received a 30 percent “discount” on the fines for cooperating fully with authorities, it sustained far more serious damage with the subsequent loss of its top management and a public pillorying at the hands of politicians.

The specter of severe penalties from regulators and the possibility of multi-billion dollar class action suits has hung over more than a dozen banks being investigated worldwide since the extent of attempts to rig Libor became clear in CFTC and FSA documents released with the Barclays settlement.

I suppose this is smart. They all know they’re guilty, and they all know they’re going to pay up eventually. And the document dumps are likely to be hugely damaging. So why not just avoid all that, fess up (sort of), and avoid the public disclosure of damning emails? It’s only money, after all, and they can make that up by furtively raising overdraft fees on all their debit card holders. Sounds like a no-brainer to me.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate