Britain’s Financial Services Authority has fined global financial firm UBS $47.5 million in a "rogue trading scandal." Mark Scott has been reporting on the scandal from London for our partner, The New York Times.
"They didn't have the right controls and mechanisms in place in house to really catch this problem when it first happened," Scott says. "It's a question of the bank itself not having the right checks and balances internally."
"These are multi-million, if not billion dollar trades on a day to day basis," Scott says. When this much money is on the line, it is important that the banks are taking responsibility for the actions of their employees.
No one is naive enough to think a $47 million fine will put a stop to illegal or irresponsible trading practices. As Mark Scott says, "It's never til the next time."
The Libor rigging scandal that started at Barclay's in London has landed, in its most recent episode, at the Federal Reserve Bank of New York. Reports that Barclay's met with the New York Fed about Libor in 2007 and 2008 implicate then-president Timothy Geithner. Nobody knows yet what those meetings were about, but the Treasury Secretary may now face grilling from some senators who want to know more.
The Libor scandal is a complex and messy situation involving interest rates in the United Kingdom, and some critics of the banks say it cuts at the jugular vein of capitalism. But what happened to make everyone so mad?