US brings about turning point in Libor scandal

In the case of the manipulated Libor interest rates, the attorneys general of the US states of New York and Connecticut have issued subpoenas to seven major banks, according to media reports. With this step the investigations into the scandal take a decisive turn, the liberal-conservative business paper Il Sole 24 Ore notes jubilantly: "With New York, the centre of the financial world is finally launching into action, and with a healthy dose of geopolitics - considering that German, British and Swiss banks are now all in the prosecutors' sights. The latter are citing a law passed in 1921 that does not require proof from the prosecutors that the accused were acting with the intention of committing fraud. … It looks like this time a verdict will be passed. All too often the authorities have confined themselves to merely imposing fines that, although high, were ultimately counter-productive. Because firstly they were never high enough to have a deterrent impact and secondly they allowed banks that had been caught red-handed to reacquire a semblance of respectability, since the sanctions were never a verdict of guilty but merely a matter of negotiated punishment."

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