What's up with the Libor scandal?

Today was the day that Federal Reserve Chairman Ben Bernanke was suppose to update the U.S. Senate Banking Committee on how government spending and tax hikes could affect the economy, markets, and unemployment.

Bernanke also was pressed to comment on what has become known as the "Libor scandal," known as financial market fraud.

Writing an editorial on July 14 in The Guardian, Naomi Wolf suggests that fraud in global financial institutions is rampant and that government regulators, including U.S. Treasury Secretary Tim Geithner, are part of an out of control problem.

"It is very hard, looking at the elaborate edifices of fraud that are emerging across the financial system, to ignore the possibility that this kind of silence – 'the willingness to not rock the boat' – is simply rewarded by promotion to ever higher positions, ever greater authority. If you learn that rate-rigging and regulatory failures are systemic, but stay quiet, well, perhaps you have shown that you are genuinely reliable and deserve membership of the club," Wolf stated.

The "Libor scandal" refers to a series of fraudulent actions connected to the London Interbank Offered Rate (LIBOR). The scandal swirls around Barclays Bank which has been fined a combined total of $360 million by the Commodities Futures Trading Commission and the U.S. Department of Justice along with fines totaling £59.5 million by the Financial Services Authority.

Barclays International is a leading global wealth manager headquartered in the UK, with total client assets of £164.2bn reported in 2011. Barclays provides international and private banking, investments management, fiduciary, and brokerage services. Barclays is a powerful institution, operating in over 50 countries and employing over 140,000 people.

According to the Federal Reserve, Libor is "a reference interest rate published by the British Bankers' Association (BBA). The BBA surveys a panel of major banks daily and asks each bank to provide the interest rate at which it believes it could borrow funds unsecured in a particular currency and for a particular maturity in the wholesale money market in London. The published rate is a trimmed average of the rates obtained in the survey."

Bankersaccuity.com, ranks Barclays fourth on the list of the world's top banks, behind Germany's Deutsch Bank, France's BNP Paribas SA, and China's Industrial & Commercial Bank of China Limited.