Upside to a Scandal: The Future of Libor Fines

Is there a silver lining for the scandal now nicknamed Lie-bor?

Probably not for Barclays Plc, but maybe for the U.S. Treasury.

Barclays admitted last month to submitting false London and euro interbank offered rates. It now owes nearly half a billion dollars in punitive charges: 59.5 million pounds to the Financial Services Authority, $160 million to the Department of Justice and $200 million to the Commodity Futures Trading Commission.

Since penalties the CFTC and DOJ collect become part of the country’s operating budget, the U.S. Treasury will soon find itself $360 million richer. Considering the hundreds of federal programs that could use the cash or whose budgets have been cut by millions, a host of possibilities exists for the record-breaking fines.

How about…

– Helping predict the weather by footing the $322 million requested (and denied) to create a national Climate Service?

– Refunding the estimated $360 million in American tax dollars lost to Afghani criminals and power brokers through the government’s combat support and reconstruction contracts?

– Promoting offshore oil and gas development oversight by funding the $358 million earmarked for reforming the system this year?

– Purchasing 70 million drumsticks to promote governmental teamwork on par with the General Services Administration’s exceptional camaraderie.

While true that $360 million won’t make a large dent in the country’s $124.6 billion budget deficit, if the other banks under investigation are required to pay fines anywhere close to those of Barclays (Morgan Stanley predicted it will pay $650 million), the Treasury alone could be looking at upwards of $4 billion in spare change.

Not a bad haul for an otherwise struggling pocketbook.

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