Plus, prosecutors recently decided not to indict HSBC for money laundering, as government officials were reportedly concerned over the repercussions to the financial system. This according to the New York Times. Instead, last week HSBC announced it had agreed to pay 1.9 billion dollars in penalties. Our guest, Neil Barofsky, believes that there should have been criminal charges, and not just fines, for HSBC's involvement with money laundering for drug cartels. We talk to Neil Barofsky about why we didn't see a stronger response from authorities and what message this sends to other big banks.
And recently we have seen headlines proclaiming "More States Dig into Libor Scandal," but why are states and cities going after banks for manipulating Libor? The issue stems from the municipalities' use of interest rate swaps, tied to Libor, to hedge risk on bond interest payments. But what exactly is an interest rate swap? Lauren breaks it down in today's "Word of the Day."
Plus, as expected, the main opposition-leader in Japan, Shinzo Abe, was elected Prime Minister yesterday. He has big plans for the Bank of Japan, including doubling its inflation target to 2 percent and calling for unlimited easing. Lauren and Demetri discuss the potential results of "Abenomics" in today's "Loose Change."
Source
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