We’re looking at one of the most topical and controversial topics of 2012 – LIBOR. There’s a surprisingly strong antitrust connection. Restructuring proposals, as well as calculating potential criminal liabilities, will demand competition experience – requiring antitrust counsel and regulator expertise well into 2013 and more. In this issue, managed by Editorial Board Member Rosa Abrantes-Metz, we look at four different sides of the question: how LIBOR should be reformed, the reasons why antitrust is so applicable and the lessons from LIBOR, the implications for antitrust compliance, and, even more specifically, the eerie similarity to cartels. In short, these articles provide all the necessary background and set the stage for future LIBOR decisions.
The Surprising Correlation Between LIBOR and Antitrust
Our proposal relies on setting up incentives for the banks to freely submit quotes which are representative of their actual borrowing costs. Rosa M. Abrantes-Metz (NYU Stern School of Business & Global Economics Group) & David S. Evans (Global Economics Group & University of Chicago Law School)
The proposed reforms are too reliant on the existing structure of LIBOR, and come too late to save it. Michael S. Barr (Univ. of Michigan)
As eye-opening as the LIBOR scandal was for the general public, it was old news for the banking industry, which had been expecting the hammer to eventually drop. David Flower (Grant Thornton)
Restraint of Trade: Does Manipulation of LIBOR Fall Within the Sherman Act’s Definition of Trade A Question of First Principles
If this reasoning is adopted, which this article contends it should be, LIBOR should fall within the purview of the Sherman Act, as it is a commodity and therefore part of trade. J. Douglas Richards & Michael B. Eisenkraft (Cohen Milstein)
Lessons for Multinational Companies from the LIBOR Investigations: Observations from an Antitrust Perspective
The proliferation of investigations is an example of a modern antitrust phenomenon cascading cartels where an investigation into one product market in a particular region promptly leads to investigations of the same product in different regions…Douglas M. Tween & Grant Murray (Baker & McKenzie)
Yet, the very nature of the manipulation, in hindsight, seems rather obvious. Rosa M. Abrantes-Metz (NYU Stern School of Business & Global Economics Group) & D. Daniel Sokol (Univ. of Minnesota Law School and Univ. of Florida Levin School of Law)
There is an abundance of circumstantial evidence to suggest that a cartel existed among LIBOR panel banks. Lianne Craig, Rodger Burnett, & Gurpreet Chhokar (Hausfeld & Co LLP)
An all-star cast in a webinar asking: Should LIBOR should be tweaked, overhauled, or blown up? And what happens to all those contracts that are pegged to LIBOR now?