Is a global LIBOR settlement coming?


Deutsche Bank co-CEO Anshu Jain dropped an interesting bit of information at a recent news conference in the wake of the bank's eye-opening $3 billion loss for the fourth quarter. He noted that he and other top bank CEOs discussed a possible global settlement to the Libor scandal, which has engulfed banks around the world.

"There were unofficial discussions, where we felt that if you went back and looked at other industries that have gone through an industry-wide settlement process, whether there is something to be gained…Pretty much all of us felt it was worth further discussing it,"  Jain said, in a Bloomberg report.

This would be a decent outcome in many ways if in fact the infractions were similar across all the offending banks. This might be the mother of all global settlements, if it truly encompassed regulators and prosecutors in different countries (notably the U.S. and the U.K.) as well as the banks based in so many countries. It seems exceedingly complex and quite unlikely, especially from a political point of view.

There have been times, when the idea made complete sense, such as the global settlement to the tainted research scandal of the dotcom era and the recent cases against top mortgage lenders and services. Then again, I fully expected a global settlement to charges of CDO marketing abuse, but that never materialized. In this case, if a global deal could be reached it might mark a milestone in terms of cooperation and investigatory efficiency.

For more:
- here's the article

Related articles:
UBS's settlement sets a troubling precedent
Is there a substitute for the Libor?

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