Young Voters Speak Out: Each day, RR.com will spotlight politically minded youth writers from throughout the U.S. speaking their minds on Election 2012. First-time voters, student journalists and new graduates will debate the Obama vs. Romney race to the White House. Young Democrats, Republicans and ‘Undecided’ Americans are eager to play politics and choose the next Commander & Chief.
Read Justin Tepper's thoughts from a moderate perspective:
The LIBOR scandal is a story that has not gotten enough play in the media, partly because of how complicated it is. However, It also reinforces the insidious nature of bankers, who I believe should have as limited an amount of resources as possible in order to save themselves, and ourselves, from their actions. We need to start treating them as if they were gamblers and limit the losses they can ensue.
18 Powerful Men
LIBOR (London inter-bank offered rate) is a number which effects around $800 trillion worth of financial assets world-wide; there is a good chance some of your money has been touched by the scandal. A small group of bankers (currently, there are 18) convene daily to set LIBOR. These individuals estimate how much their banks would have to pay if they needed a loan. The four highest and lowest estimates are discarded and the remaining are averaged to produce LIBOR.
This number is then used as a reference in the global financial market, including within the U.S. Mortgages, student loans, and derivatives are all calibrated in part by the figure -decided upon by the bankers. If this number is being determined by false data, the fallout could be catastrophic. That is exactly what was occurring for at least five years. The first bank to get caught manipulating LIBOR by submitting artificial numbers was Barclays, a 300-year old British institution. Nevertheless, the scope of the scandal is going to be broad and touch banks all over the world. Barclays was fined roughly $450 million but potential lawsuits and distrust could cripple a large segment of the already unstable financial market.
A Dishonor System
Institutions and individuals profited from the falsifications. It is also a reminder of how the banks have grown too large and have too much influence over the world. The bankers who calculated LIBOR submitted their own information. While they are supposed to be watched by the British Banker's Association, there is no law stating that banks need to release the numbers involved in transactions. Therefore, LIBOR was partly based on an honor system that has become anachronistic in our age of avarice.
Grand Theft Capital
The largest banks have been stealing from the world's population and ought be regulated and watched over with more stringency. The amount of money a bank can use for trading and investing should be curtailed. Investment and capital banks should be partitioned again. President Obama has not cracked down on the usurers but one would have to think Mitt Romney, with his history at Bain Capital, would favor them even more. We cannot let this happen. Bankers cannot be left to their own devices because the money they are gambling away is not theirs but ours!