Synopses & Reviews
and#147;Gaming the LIBORand#151;that is, fixing the price of moneyand#151;had become just that: a game. Playing it was the price of admission to a club of men who socialized together, skied in Europe courtesy of brokers and expense accounts, and reaped million-dollar bonuses.and#8221; In the midst of the financial crisis of 2008, rumors swirled that a sinister scandal was brewing deep in the heart of London. Some suspected that behind closed doors, a group of chummy young bankers had been cheating the system through interest rate machinations. But with most eyes focused on the crisis rippling through Wall Street and the rest of the world, the story remained an and#147;open secretand#8221; among competitors.
Soon enough, the scandal became public and dozens of bankers and their bosses were caught red-handed. Several major banks and hedge funds were manipulating and misreporting their daily submission of the London Interbank Offered Rate, better known as the LIBOR. As the main interest rate that pulses through the banking community, the LIBOR was supposed to represent the average rate banks charge each other for loans, effectively setting short-term interest rates around the world for trillions of dollars in financial contracts.
But the LIBOR wasnand#8217;t an average; it was a combination of guesswork and outright lies told by scheming bankers who didnand#8217;t want to signal to the rest of the market that they were in trouble. The manipulation of the and#147;worldand#8217;s most important numberand#8221; was even greater than many realized. The bankers kept things looking good for themselves and their pals while the financial crisis raged on.
Now Erin Arvedlund, the bestselling author of Too Good to Be True, reveals how this global network created and perpetuated a multiyear scam against the financial system. She uncovers how the corrupt practice of altering the key interest rate occurred through an unregulated and informal honor system, in which young masters of the universe played fast and loose, while their more seasoned bosses looked the other way (and would later escape much of the blame). It was a classic private understanding among a small group of competitorsand#151;you scratch my back today, Iand#8217;ll scratch yours tomorrow.
Arvedlund takes us behind the scenes of elite firms like Barclays Capital, UBS, Rabobank, and Citigroup, and shows how they hurt ordinary investorsand#151;from students taking out loans to homeowners paying mortgages to cities like Philadelphia and Oakland. The cost to the victims: as much as $1 trillion. She also examines the laxity of prominent regulators and central bankers, and exposes the role of key figures such as: and#160;
- Tom Hayes: A senior trader for the Swiss financial giant UBS who worked with traders across eight other banks to influence the yen LIBOR.
- Bob Diamond: The shrewd multimillionaire American CEO of Barclays Capital, the British bank whose traders have been implicated in the manipulation of the LIBOR.
- Mervyn King: The governor of the Bank of England, who ignored U.S. Treasury secretary Tim Geithnerand#8217;s repeated recommendations to establish stricter regulations over the interest rate.
Arvedlund pulls back the curtain on one of the great financial scandals of our time, uncovering how millions of ordinary investors around the globe were swindled by the corruption and greed of a few men.
Review
Praise for Erin Arvedlund's National Bestseller,and#160;Too Good To Be True and#8220;Arvedlundand#8217;s compelling account bristles with outrage at those whose avarice or negligence enabled Bernie.and#8221;
and#8212;Time
and#8220;Ms. Arvedlund . . . works hard to situate the Madoff mess within the larger framework of hedge-fund mania and the Wall Street recklessness that led to the fiscal cataclysms of 2008.and#8221;
and#8212;The New York Times
and#8220;She not only brings great lucidity to the subject but supplies invaluable context about the devices that Mr. Madoff used to perpetuate his confidence game.and#8221;
and#8212;The Wall Street Journal
and#8220;Good reporting from the journalist who was there first . . . the book . . . will get you mad all over again.and#8221;
and#8212;Bloomberg.com
Synopsis
The untold story of the Madoff scandal, by one of the first journalists to question his investment practices
Despite all the headlines about Bernard Madoff, he is still shrouded in mystery. How did he fool so many smart investors for so long? Who among his family and employees knew the truth?
The person best qualified to answer these questions is Erin Arvedlund. In early 2001, she was suspicious of the amazing returns of Madoff's hedge fund. Her subsequent article in Barron's could have prevented a lot of misery, had the SEC followed up.
Arvedlund presents a sweeping narrative of Madoff's career-from his youth in Queens, New York, to his early days working for his fatherandshy;in- law, and finally to infamy as the world's most notorious swindler.
Readers will be fascinated by Arvedlund's portrayal of Madoff, his empire, and all those who never considered that he might be too good to be true.
Synopsis
A bestselling financial reporter exposes the decades-long banking conspiracy that swindled ordinary investors out of billions Following her national bestseller Too Good to Be True, the inside story of the Bernie Madoff scandal, Erin Arvedlund brings her reporting chops and deep financial expertise to the first book to tell the full story of the Libor scandal.
In 2012, news broke that a group of young, chummy bankers had, for years, been colluding to manipulate the London Interbank Offered Ratethe interest rate that determines how money is borrowed and lent throughout the world. They set the Libor higher or lower to suit each others needs, while ordinary savers and investors suffered without even knowing it. It was a classic open secret” among competitors that cost countless victims as much as $1 trillion.
Arvedlund takes us behind the scenes of elite firms like Barclays Capital, where twenty-something masters of the universe played fast and loose, while their bosses looked the other way. She also examines the failures of prominent regulators and other officials.
About the Author
Erin Arvedlund began her career as a reporter at Dow Jones newswires in 1993. In 1996, she moved to Moscow to write about business and emerging markets for The Moscow Times. In 1998, she joined TheStreet.com, one of the first real-time news and stock market web sites. She then moved to Barron's magazine to cover options, mutual funds and hedge funds from 2000-2003. From late 2003 to 2005 Arvedlund reported on business and politics in the former Soviet Union for The New York Times. She also has Wall Street experience, having worked in the hedge fund industry at two separate firms, Vision Opportunity Capital Management and Sanford C. Bernstein. Arvedlund has a B.A. from Tufts University in International Relations and studied abroad for a semester at Leningrad State University in St. Petersburg. She has also freelanced extensively for print and online magazines such as Fortune, Outside, The Economist Intelligence Unit, Portfolio.com, and Slate.com. She is married and divides her time between New York and Philadelphia.