Topic: Interest Rate Swaps

Ellen Brown, founder of the Public Banking Institute, discusses the lack of accountability for major banks following the 2008 financial crisis. She highlights the LIBOR scandal, where international banks colluded to manipulate interest rates affecting $400 trillion in contracts. Brown notes that while the savings and loan crisis of the 1980s resulted in a thousand prison sentences, modern banking executives remain immune to criminal prosecution, with fines being paid by shareholders rather than perpetrators.

Ellen Brown explains the mechanics of the LIBOR rate and how interest rate swaps are used to manipulate costs for state and local governments. She describes the Federal Reserve as a banker-owned entity that sets low rates to protect private banking interests at the expense of public entities. The discussion defines derivatives as complex bets on market variables, warning that current credit default swaps on oil derivatives pose a significant threat to the global economy.