The Royal Bank of Scotland will have to pay more than $600 million to U.S. and UK regulators for its role in rigging the LIBOR interest rate. RBS is one of several banks that rigged LIBOR in order to make huge profits, as regulators looked the other way.

The Commodity Futures Trading Commission today released transcripts of electronic conversations between RBS traders and their clients that reveal just how explicit they were about rigging the rate in order to boost their respective bottom lines. Here are some of the highlights:

Yen Trader 1: where would you like it[,] libor that is[,] same as yesterday is call

Yen Trader 4: haha, glad you clarified ! mixed feelings but mostly I’d like it all lower so the world starts to make a little more sense.

Senior Yen Trader: the whole HF [hedge fund] world will be kissing you instead of calling me if libor move lower

Yen Trader 1: ok, i will move the curve down[,] 1bp[,] maybe more[,] if I can

——————

Senior Yen Trader: its just amazing how libor fixing can make you that much money

[…]

Senior Yen Trader: its a cartel now in london[.] they smack all the 1yr irs ..and fix it very high or low

——————

Yen Manager: for choice we want lower libors…let the [Money Market] guys know pls

Yen Trader 2: sure i am setting today as [Yen Trader 1] and cash guy off [Primary Submitter]

Yen Manager: great set it nice and low

——————-

Swiss Franc Trader: can u put 6m swiss libor in low pls?

Primary Submitter: NO

Swiss Franc Trader: should have pushed the door harder

Primary Submitter: Whats it worth

Swiss Franc Trader: ive got some sushi rolls from yesterday?

[…]

Primary Submitter: ok low 6m , just for u

Swiss Franc Trader: wooooooohooooooo[,] 0.01%? thatd be awesome

Primary Submitter: 1.33

Swiss Franc Trader: perfect[.] u r a nice man

These emails are right in line with those uncovered at other banks that were rigging LIBOR. This rigging may have cost U.S. taxpayers billions of dollars, but by and large, U.S. media have ignored it.

43 Republican senators signed a letter last week saying that they would obstruct any nominee to run the Consumer Financial Protection Bureau, regardless of qualifications, unless the CFPB is weakened. Republicans are essentially attempting to nullify a federal law via obstruction; Congress passed and President Obama signed a bill creating a CFPB, but the GOP is ensuring that it can’t function.

By weakening the CFPB, the GOP is doing the bidding of Wall Street’s biggest banks, which would have preferred that a regulator solely focused on consumer protection never come into being. Here are some facts and figures that Public Campaign pulled together on how much cash Wall Street has handed over to the 43 GOP’ers publicly obstructing Obama’s nominee:

– The 43 Senators have received $143 million in industry cash during their time in Washington.

– Sen. John McCain (R-Ariz.), boosted by his 2008 presidential bid, is the top recipient of financial industry cash of those signing the letter, with $36.7 million in donations from the industry. McConnell is second with $7.4 million in donations. Sen. Mike Crapo (R-Idaho), the ranking member of the Senate Banking committee, has received $2.4 million in industry cash. [...]

– The six Senators recently elected, or re-elected, in November who signed the letter — Sen. John Barrasso (R-Wyo.), Ted Cruz (R-Texas), Jeff Flake (R-Ariz.), Orrin Hatch (R-Utah), Dean Heller (R-Nev.), and Roger Wicker (R-Miss.) — received nearly $7 million altogether in industry donations in the 2012 cycle. Hatch tops this list with $2 million raised from the industry for his last election.

Sen. Rob Portman (R-OH), who is one of two Republican senators that did not sign the letter, said last week that Richard Cordray, who was recess-appointed by Obama to be the first CFPB director, simply accede to the GOP’s hostage-taking and call for watering down his own agency.

A bipartisan duo of senators sent a letter to the Department of Justice today to press Attorney General Eric Holder on the lack of prosecutions for employees and executives of the nation’s largest banks in the wake of financial crisis. The letter from Sens. Sherrod Brown (D-OH) and Chuck Grassley (R-IA) questioned Holder about “whether the ‘too big to fail’ status of certain Wall Street megabanks undermines the ability of the federal government to prosecute wrongdoing and impose appropriate penalties.”

“Wall Street megabanks aren’t just too big to fail, they’re increasingly too big to jail,” Brown said in a release. “Already, the nation’s six largest megabanks enjoy what amounts to taxpayer-funded guarantee by virtue of their size, making it harder for regional and community banks to compete. Now, these megabanks may also enjoy some impunity when they violate the law by laundering money or illegally foreclosing on homeowners. Wall Street should pay the full price of its wrongdoing, not pass the costs along to taxpayers.”

“Unfortunately, we’ve seen little willingness to charge these individuals criminally,” Grassley added. “The public deserves an explanation of how the Justice Department arrives at these decisions.”

Last month, Grassley criticized the “get out of jail free card” that has been given to the nation’s largest financial institutions, which have largely avoided serious prosecution since the financial crisis. Prosecutions for financial fraud hit a 20-year low in 2011. Many of the fines the banks have paid are tax-deductible, a problem Brown is currently seeking to remedy.

“Unfortunately, many of the settlements between large financial institutions and the federal government involve penalties that are disproportionately low, both in relation to the profits which resulted from those wrongful actions as well as in relation to the costs imposed upon consumers, investors, and the market,” Grassley and Brown wrote in the letter, adding that the perception that large banks are too big to face real prosecution “undermines the public’s confidence in our institutions and in the principal that the law is applied equally in all cases.”

As the nation slowly ground its way out of the Great Recession, the biggest banks in the country (whose malfeasance played a large role in creating the downturn) grew even larger. According to data from the Dallas Federal Reserve, the largest 0.2 percent of all banks now control nearly 70 percent of all banking assets:

As of third quarter 2012, there were approximately 5,600 commercial banking organizations in the U.S. The bulk of these—roughly 5,500—were community banks with assets of less than $10 billion. These community-focused organizations accounted for 98.6 percent of all banks but only 12 percent of total industry assets. Another group numbering nearly 70 banking organizations—with assets of between $10 billion and $250 billion—accounted for 1.2 percent of banks, while controlling 19 percent of industry assets. The remaining group, the megabanks—with assets of between $250 billion and $2.3 trillion—was made up of a mere 12 institutions. These dozen behemoths accounted for roughly 0.2 percent of all banks, but they held 69 percent of industry assets.

The Dallas Fed, led by Richard Fisher, has consistently called for the largest banks to be broken up, as have some lawmakers. “These banks are not just too big to fail, they’re too big to manage,” said Sen. Sherrod Brown (D-OH). “I think these banks will be stronger and healthier and probably more profitable if they’re smaller.”

Instead of breaking up the biggest banks, the Dodd-Frank financial reform law of 2010 attempts to wall off some of the riskiest activities in which mega-banks engage and lays out a process for unwinding failing financial firms without resorting to ad hoc bailouts. Banks are looking to water down or circumvent the former (and may sue if they don’t get their way), while House Republicans have made a concerted effort to repeal the latter. (HT: Zero Hedge)

While women who preside at the top of their companies are still a tiny minority, studies show businesses led by women often outperform industry averages. And this tendency applies to the hedge fund industry, according to a new survey from Rothstein Kass.

Hedge funds headed by women had higher returns of 8.95 percent, compared to hedge fund 2012 averages of 2.69 percent, the survey shows. However, female hedge fund managers are a rare find, The New York Times’ Dealbook reports:

Only 16 percent of the survey respondents said their firms were owned or managed by women. Of the respondents from hedge funds, 16.8 percent fell into this category, while 13 percent of those in venture capital and 12 percent of those in private equity said women were in charge.

The survey found that 18 percent of the firms surveyed had female chief investment officers, and 16 percent had chief executives who were women.

That is not the only evidence suggesting firms would be better served by more women: Hedge funds run by women fell only half as much during the financial crisis, and several other studies show “that women are more profitable investors, money managers and hedge fund managers, and they incur less risk in the process.”

Overall, businesses with women on their boards outperform those with all-male boards by 26 percent, yet 36 percent of U.S. companies still have no sitting women.

Even when women reach the top of a company, they face a wage gap. Throughout the financial sector, women make only 62 cents for a man’s dollar, and the problem persists for female CEOs and CFOs.

Regulators have decided to delay rules that would have required Wall Street banks to isolate some of their risky derivatives trading in entities not backed by taxpayers. Banks will now have until at least 2015 to comply with the rules, Bloomberg News reports:

JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and Bank of America Corp. won a delay of Dodd-Frank Act requirements that they wall off some derivatives trades from bank units backed by federal deposit insurance.

Commercial banks including the Wall Street firms may get as long as an additional two years — until July 2015 — to comply with the rules, the Office of the Comptroller of the Currency said in a notice yesterday. The provision was included in Dodd- Frank, the 2010 financial-regulation law, as a way to limit taxpayer support for risky derivatives trades…The so-called push-out provision of Dodd-Frank requires that equity, some commodity and non-cleared credit derivatives be moved — or pushed out — into separate affiliates without federal assistance.

“The procrastination of both regulators and the banks on this portion of Dodd-Frank has been pretty amazing,” said Marcus Stanley, policy director for Americans for Financial Reform. “The swaps-pushout provision is a really important part and something that absolutely should be a central part of the regulatory framework.” As economists Jane D’Arista and Gerald Epstein wrote, “the intent is to remove risky activities from the core banking functions that are essential to the economy and to ensure that those risky activities will not trigger the need for a bail out to prevent systemic collapse in the future as they did in the 2008 crisis.”

This is hardly the first rule from the Dodd-Frank financial reform law to get bogged down in delays. The Volcker Rule — also meant to rein in risky bank trading with dollars backed by the government — has been delayed, and House Republicans want to push back its implementation even further.

Since the passage of the Dodd-Frank financial reform law, lobbyists for Wall Street banks have been trying to gum up the implementation of many of its rules. Particular ire has been reserved for the Volcker Rule, which is meant to rein in the sort of risky trading that contributed to the financial crisis.

While the biggest banks may kvetch about the Volcker Rule, the vast majority of the nation’s banks won’t be affected by it, as a new report from Public Citizen finds:

There are 7,181 federally insured banks in the United States. After a new rule is implemented to prohibit banks from making risky trades, the business activities of 7,175 of these banks will remain essentially unchanged. The Volcker Rule, among the most controversial aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act, will prohibit federally insured banks from engaging in proprietary trading, which involves speculation through short-term trades in stocks, derivatives and other securities.

The financial crash, borne of reckless banking practices, cost the economy about $12 trillion, give or take. But Wall Street lobbyists have succeeded in elevating concerns over the relatively minuscule costs of the Volcker Rule to a paramount position in the debate over how regulations should be crafted to implement it. In reality, the Volcker Rule will mean no change, no closure of business divisions, no costs from foregone financial activity, for more than 99.9 percent of banks.

The rule will, according to an estimate by Standard & Poors, reduce profits at the eight largest banks by a combined $10 billion. However, that’s out of a combined $63 billion in profits last year. And S&P also notes that those same banks would be made safer and more stable by the rule. A study by economists Arnoud Boot at the University of Amsterdam and Lev Ratnovski at the International Monetary Fund found that something like the Volcker Rule is necessary to prevent big banks from threatening the whole economy.

One of the prime drivers of income inequality has been the ever-increasing amount paid to both CEOs and workers in the financial industry. In fact, according to the Economic Policy Institute, “Executives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005.”

However, Jamie Dimon, CEO of JP Morgan Chase, America’s largest bank, doesn’t believe Wall Street pay has anything to do with growing inequality. Furthermore, he thinks efforts to realign the bad incentives in Wall Street compensation will turn the United States into communist Cuba:

DIMON: I don’t like the fact that we have an increase in inequality in the United States. But you better be very careful if you say we’re having that because I paid that person properly. All of you have the right to say ‘I want to be paid what I’m worth in the market.’ That’s perfectly fair…We all want an equitable society. We need to have a conversation about what makes it equitable. You can go do it the way that Cuba tried. Okay, well, then it will be equitable but everyone won’t have much. So you’ve got to be very thoughtful how you go about it. So I don’t see people say ‘I want inequity.’ I don’t want to make more money if everyone else makes less. We want to lift society up so everyone’s better off. That does not mean that people don’t have to pay people what they’re competitively worth. If you don’t want a free society then start dictating what compensation can be.

Watch it:

As a recent study in the Quarterly Journal of Economics showed, banker pay skyrocketed after the deregulation of the 1980s and 1990s, and also became “riskier and more backloaded.” And even some Wall Street heavywights have started to push back against outsized compensation. “I think the kind of money that’s made and the way it was flaunted — look it’s wrong. [...] The money was really unbelievably generous, to say the right word,” said former Morgan Stanley CEO John Mack.

The problem with ever-growing pay is not only that it contributes to income inequality (and often bears no relation to the success of the firm, as evidenced by former Citigroup CEO Vikram Pandit receiving $260 million to run his bank into the ground). Wall Street pay can also put the whole economy in trouble, if the incentives are to take huge risks that end up putting a systemically significant bank at the edge of collapse. Hence, the Dodd-Frank financial reform law gives the Federal Reserve the power to veto pay packages that might cause such a situation.

Citigroup announced on Wednesday that it will cut 11,000 jobs, or 4 percent of its workforce, in an effort to trim expenses.

The moves comes one month after Citigroup paid out nearly $14 million to two former executives, CEO Vikram Pandit and Chief Operating Officer John Havens, who were ousted for poor management. The Citigroup board forced Pandit out, “after a series of missteps this year left some directors feeling that the company wasn’t being managed effectively and that the board wasn’t kept adequately informed.”

Under Pandit and Havens, Citigroup lost 88 percent of its stock value. Still, the executives walked away with generous pay packages:

Vikram Pandit, Citigroup Inc. (C)’s ousted chief executive officer, will get about $6.7 million in 2012 compensation and will forfeit some awards tied to a $40 million retention package granted last year.

John Havens, who resigned last month as Citigroup’s chief operating officer on the same day as Pandit, will get about $6.8 million for 2012 and also forfeit some awards, the New York- based lender said yesterday in a regulatory filing. Citigroup is the third-largest U.S. bank by assets.

“Based on the progress this year through the date of separation, the board determined that an incentive award for their work in 2012 was appropriate and equitable,” Chairman Michael E. O’Neill said in the filing.

It is something of a trend for corporations to pay top executives high salaries, while employees feel the consequences of a struggling company. After failed Twinkie-maker Hostess declared bankruptcy, it cut workers’ pay 8 percent, but left the CEO’s $1.5 million salary untouched.