Scott asks for deeper probe into Libor scandal and its impact on Floridians
Gov. Rick Scott has fired off a letter to Florida’s representatives in Congress, asking them to turn up the heat on an investigation into an international banking scandal he says has impacted Floridians.
Last month, Barclays Capital was fined more than $450 million over allegations that it fraudulently manipulated the London Interbank Offered Rate, or Libor. There are signs that more banks could be involved in the scandal over Libor, which sets interbank lending rates in ways that trickle down to impact nearly every consumer’s cost of living.
“The potential impacts on the income, retirement savings and costs of living for so many Floridians deserve immediate attention to ensure that they have not and will not suffer unfair consequences as a result of this severe breach of trust,” Scott wrote in a letter to Florida's congressional delegation.
Scott wants Florida members of Congress to find out how the Libor manipulation scandal has impacted Florida families and small businesses. At least five states--including Florida--are investigating how the scandal has impacted them locally, according to Bloomberg Businessweek.
“Based on what has been reported already, these inappropriate banking practices have cost hardworking Floridians money,” Scott wrote. “As investigations into other institutions proceed, the question that must be answered is “how much money has this cost Florida families?”
Of note, Scott signed off on a budget earlier this that slashed funding for the state’s Office of Financial Regulation, which is tasked with regulating local banks and rooting out bad actors at the state level.
Several OFR branch offices were closed, and dozens of employees were let go from the watchdog agency. Critics of the move say slashing funding for OFR at a time of increased fraud in the financial services industry opens the door to more banking scandals at the local level.
On Monday, the Tampa Bay Times reported that former OFR president and Scott’s political ally Tom Grady, used state money for an extensive personal spending spree, while pushing for layoffs and budget cuts at the state regulator.
U.S. regulators were grilled Tuesday over the scandal. Read Scott's letter here.