When CFTC Chairman Gary Gensler spoke to the annual meeting of the Institute of International Bankers held in Washington on March 4, he discussed, among other timely topics, the continued reliance of the credit markets on the London Interbank Offered Rate (LIBOR), which he correctly asserted is ill-advised. He mentioned that in 2012 LIBOR was dramatically more stable than comparable measures of volatility. According to Chairman Gensler, for more than 115 straight trading days the LIBOR three month U.S. dollar rate did not change.
Perhaps it is time to investigate LIBOR once more, starting where the recent settlements left off. The marvels of modern word processing could make the burden of issuing new subpoenas a matter of minutes. The attorneys and investigators that first snagged the liars now have a learning curve behind them. It could be a perfect example of doing more with less. And if this unbelievable stability is a sign of unbelievable stupidity or hubris, doesn't it cry out for continued redress? Perhaps the tuition was too low for the last lesson in civic responsibility.
Chairman Gensler's public expression of skepticism about this remarkable turn of events implies that his staff likely shares his doubts. Hopefully, enforcement officials will be able to head off any corps of bankers hammering away at the "delete" buttons on their keyboards and running red-hot shredders.
