CNBC reports, here:
Activity in the Libor investigation, which has been going on for three years, has quickened since Barclays agreed last month to pay $453 million in fines and penalties to settle allegations with regulators and prosecutors that some of its employees tried to manipulate key interest rates from 2005 through 2009. ...
Morgan Stanley recently estimated that the 11 global banks linked to the Libor scandal may face $14 billion in regulatory and legal settlement costs through 2014.
These sums are paltry in comparison with the enormity of the skim operation siphoning off profits on hundreds of trillions of dollars worth of transactions.
It almost sounds like the lowball fines were themselves defined by the very regulators already suffering from "regulatory capture".
Satyajit Das, here, provides an in-depth exploration of the LIBOR scandal which includes considerable speculation about the sums lost. He points out that by one unrealistic estimate up to $80 billion is involved, which means the actual damages are far south of that.
On the other hand, he includes this:
Many American corporations and municipalities entered into interest rates swaps where low rates would have resulted in significant losses. The International Monetary Fund estimates the amount lost by municipalities at US$250 billion to US$500 billion in 2010. If successful action is brought under US anti-trust regulation, then banks may be liable for punitive triple damages.
Investment bank Morgan Stanley estimates that losses to banks could total (up to) US$22 billion in regulatory penalties and damages to investors and counterparties, equivalent to around 4-13% of banks’ 2012 earnings per share and 0.5% of book value. In reality, it is difficult to accurately quantify potential losses.
It would seem as of this moment that both banks and regulators have a significant legal and financial interest in suppressing the actual extent to which those last in line for money were fleeced.
