As regulators ramp up their global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal.
The department's criminal division is building cases against several financial institutions and their employees, including traders at Barclays, the British bank, according to government officials close to the case who spoke on the condition of anonymity because the investigation is continuing. The authorities expect to file charges against at least one bank later this year, one of the officials said.
The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities....Not to mention the impetus it gives for financial institutions to provide ultra transparency.
In fact, there is likely to be a race among financial institutions to provide on an on-going basis their current asset, liability and off-balance sheet exposure details as this is a signal to the market that the bank has nothing to hide!
Banks that don't provide ultra transparency are sending a signal to the market that they have something to hide and therefore are much riskier.
The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission.
Collectively, the civil and criminal actions could cost the banking industry tens of billions of dollars.
Authorities around the globe are examining whether financial firms manipulated interest rates before and after the financial crisis to improve their profits and deflect scrutiny about their health.Banks that provide ultra transparency are saying that they can stand on their own two feet and do not need to lie to make money or prove that they are financially healthy.
Banks that don't provide ultra transparency are clearly indicating they need to lie to make money and stay in business.