Tuesday, October 29, 2013

LIBOR Scandal: UK banker: “We're clean, but we're dirty-clean, rather than clean-clean.”

The banking system is reeling from admissions by senior bankers that they acted in concert with other bankers to fix the setting of the interbank interest rate (LIBOR), so as to make dishonest profits.

The BBC is running a series of shows on the culture of corruption that crept into international banks over the years, resulting in dishonest and illegal price-fixing, and the loss of billions to innocent, law-abiding people.

As far back as 2008, UK bankers were freely admitting that they were rigging LIBOR:
Around this time, according to the CFTC, a senior Barclays treasury manager informed the BBA in a phone call that Barclays had not been reporting accurately. But he defended the bank, saying it was not the worst offender: "We're clean, but we're dirty-clean, rather than clean-clean."
"No one's clean-clean," the BBA representative responded.

The regulatory authorities of many major countries turned a blind eye to early warning signals, and dragged their feet when forced to confront reality.

Nobody comes out clean in this mess. Several banks have paid massive fines, but very few senior bankers have faced jail sentences.

Until that happens, the lessons will not have been learned. Banking depends on trust, and those who abuse it for personal gain need to be made an example of.

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