We haven’t heard much about the Libor scandal lately. With a hurricane, political conventions and the start of the NFL season around the corner, I guess it is easy to figure out why.
So if you’re not in the banking industry, it may be hard to appreciate just what a mess the Libor scandal really is. While the mainstream media has been looking elsewhere, more and more lenders and investors have decided they got ripped off.
Which brings us to our number of the day: $88 billion.
That’s how much the banks that make up the Libor panel could end up paying in regulatory fines and lawsuits — for manipulating the interest rate behind all other interest rates.
And this could be a conservative estimate.
The Australian firm of Macquarie Research, which compiled that number, said Libor fraud may have cost investors $176 billion — and that’s just if banks understated the Libor rate in 2008 and 2009 by 0.4 percentage points.
If it comes even close to that, you can be pretty sure taxpayers are going to be in line to help out the banks once again.
