From: Occupy.com
by Ellen Brown
Taxpayers are paying billions of dollars for a swindle pulled off
by the world’s biggest banks, using a form of derivative called
interest-rate swaps; and the Federal Deposit Insurance
Corporation
has now joined a chorus of litigants suing over it. According
to an SEIU report:
“Derivatives... have turned into a windfall for banks and a
nightmare for taxpayers... While banks are still collecting fixed
rates of 3 to 6 percent, they are now regularly paying public
entities as little as a tenth of one percent on the outstanding
bonds, with rates expected to remain low in the future. Over the life
of the deals, banks are now projected to collect billions more than
they pay state and local governments – an outcome which amounts to
a second bailout for banks, this one paid directly out of state and
local budgets.”
It is not just that local governments, universities and pension
funds made a bad bet on these swaps. The game itself was rigged, as
explained below. The FDIC is now suing in civil court for damages and
punitive damages, a lead that other injured local governments and
agencies would be well-advised to follow. But they need to hurry,
because time on the statute of limitations is running out.
The Largest Cartel in World History
On March 14, 2014, the FDIC filed suit for LIBOR-rigging against
sixteen of the world’s largest banks – including the three
largest US banks (JPMorgan Chase, Bank of America, and Citigroup),
the three largest UK banks, the largest German bank, the largest
Japanese bank, and several of the largest Swiss banks. Bill Black,
professor of law and economics and a former bank fraud investigator,
calls them “the largest cartel in world history, by at least three
and probably four orders of magnitude.” MORE
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