September 16, 2012
Barclay Bank Scandal
This week our team decided to reflect on the Barclay Bank Scandal. We discussed how this scandal has affected banks all over the world and how it is affecting the people, especially those who have mortgages, student loans, and credit cards. People will see their interest rates go up even hirer than they are now. Barclay has issued an apology and is now trying to put the pieces back together and fix what had happened.
Barclay is a banking system under investigation for fraud and mismanagement of business practices. The inflated credit ratings so countries such as Italy could borrow money. The problem is that Italy cannot pay the notes and the international credit rating has gone to an all-time low. The Italian government is in major trouble with a falling economy. Many of the European banks are currently in this investigation. Barclay Bank is also under investigation for money laundering through another company HSBC bank, who recently was in the news for this. Many banks across the world are becoming part of this down fall. Several in the United States are also falling prey to this business practice. Many people buying houses could not pay for them and the government implies that the banks knew this and lent the money out anyway. Knowing the money was not there to pay for the homes; foreclosures began, leaving millions of Americans without homes. Many of the credit card companies are also overcharging customers and lending credit to people when they know they will. The Barclay scandal involves the rating system, which is called London interbank offered rate or Libor. Libor is a rate that is posted everyday by banks at which the banks are willing to borrow from. Libor actually affects how the interest rates affect the public, those of us who pay on student loans, home mortgages, and credit cards.