Congressman Mike Michaud joined with his colleagues to urge the Department of Justice to carefully investigate bank officials who participated in manipulating the London interbank offered rate (Libor) throughout the financial crisis and aggressively proceed with criminal prosecution where laws were broken. The London-based bank Barclays has already admitted wrongdoing and indicated the practice was widespread. The Libor serves as a benchmark for global borrowing rates.
"This rate matters because it impacts so much," said Michaud. "If someone finances the purchase of a home or car, it's very possible that the Libor was used to calculate the terms of their loan. We need to get to the bottom of this rate rigging and prosecute those who broke the law and enriched themselves at the expense of consumers and businesses throughout the country and around the world."
A letter spearheaded by Congressman Peter Welch of Vermont that Michaud signed today.
The Honorable Eric Holder
United States Attorney General
Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Attorney General Holder:
We urge the Department of Justice to carefully investigate all senior bank officials who participated in manipulating the London interbank offered rate (Libor) throughout the financial crisis and aggressively proceed with criminal prosecution in any instances where these officials broke the law.
Recent press reports and statements from Barclays' former Chief Executive Officer, Robert Diamond Jr., indicate that more than a dozen banks may have participated in this scheme. Their self- serving efforts enriched banks and traders at the expense of investors, businesses, consumers, pension funds, and municipalities.
Vigorous investigation and enforcement is essential to re-establishing confidence that global financial markets are transparent, not opaque and that they are competitive, not rigged. Any bank officials found to have committed crimes must be aggressively prosecuted to the full extent of the law.
Banks and traders who profited should be compelled to forfeit all illicit profits. And bad actors should no longer be allowed to outsource punishment to their shareholders. It's time for them to spend time behind bars.