Minor update on banking settlements
Just a few tidbits on the massive settlements for manipulating forex and Libor rates.
4/23 – Zero Hedge – It Just Cost Deutsche Bank $25,000 Per Employee To Keep Its Libor Manipulating Bankers Out Of Jail – Here is another way to look at the $2.5B settlement negotiated by Deutsche Bank. It cost about $25,000 per employee to settle up for manipulating LIBOR rates. If you manage a department with 10 employees that would be the same as either having to generate an additional $250,000 bottom line after-tax profits or cut your budget by a quarter of $1 million.
You can send your thank you note to the trading desk. I’m sure they appreciate your sacrifice to keep them out of jail.
4/30 – Wall Street Journal – Bank of America to Pay $180 Million to Settle Investors’ Forex Lawsuit – BofA’s settlement is $180M for the private lawsuit over manipulating forex rates.
JP Morgan, Bank of New York, and UBS have already settled up. Article says there are seven more lawsuits yet to settle. I’ll make a guess on the total settlements of the private lawsuits at $1.6B.
4/30 – Wall Street Journal – Barclays Boosts Expected Bill for Foreign-Exchange Fines to More Than $3 Billion – Article says they have increased an estimate of total forex exposure to about $3B. I can’t quite track that amount because it seems to be what I read before as to a guess on their total exposure.
My current point estimate on industry wide settlements is about $19.7B for forex and around $8.7B for Libor.