Please note: this is a supplement to “Diamonds and Rust: The Need for Ethical Climate Change in Banking“, posted 9 July 2012
If you donâ€™t understand what all the Libor fuss is about, here are some exemplary explainers and commentaries. The first batch comes from the U.K.; the second from American observers and experts.
- The Economist is outraged: In â€śThe Rotten Heart of Financeâ€ť it said the Libor scandal â€ścorrodes further what little remains of public trust in banks and those who run them.â€ť In “Banksters” the editors call for a clean-up, saying, “Popular fury and class-action suits are seldom a good starting point for new rules. Yet despite the risks of banker-bashing, a clean-up is in order, for the banking industryâ€™s credibility is shot, and without trust neither the business nor the clients it serves can prosper.”
- Up-to-the-minute coverage of the Libor scandal provided by the Financial Times and The Guardian give content and context to the fast-evolving story;
- Perhaps my favorite: FTâ€™s piece on â€śHow traders trumped Quakersâ€ť, which describes the erosion of Quaker values of integrity and trust as Barclays banking culture moved from respectable (albeit elite) to something else. John Piender describes the battleground between retail and commercial bankers on the one side, and investment bankers on the otherâ€”and evokes Michael Lewisâ€™ Liar’s Poker in the process.
As for what Americans are saying, take a look at:
- Politico‘sÂ backgrounder, with loads of hyperlinks, written byÂ Cora Currier;
- Dylan Matthewsâ€™ explainer inÂ the Washington Post;
- The elegant breakdown provided by Marketplaceâ€™s New York bureau chief Heidi Moore;
- The insights provided by New York Times columnist Joe Nocera, who pointed out the reaction in the U.K. is far more intense than here, and that, â€śOnce again, it leads one to believe that bankers feel neither the constraints of the law nor of moralityâ€ť;
- NYTimes business columnist Gretchen Morgensonâ€™s call for American regulators to get cracking on similar reform. â€śItâ€™s hard to believe, in the wake of the Libor mess, that Wall Street and its supporters in Congress would continue to battle against price transparency in any market. Then again, thatâ€™s precisely what they did after the credit crisis. With each new financial imbroglio, the gulf widens between Main Streetâ€™s opinion of Wall Street and the industryâ€™s view of itself.â€ť She should know: sheâ€™s an expert on how the Wall Street / Washington revolving door culture contributed to the Â financial crisis
Most pungently, writing on GMI Ratingsâ€™ blog, governance expert Nell Minow justifiably dismisses broad-stroke spinning of the Libor story by calling it what it is. â€śThe scandal is about price-fixing. Â It is about a bank, or rather the executives and the board of directors of a bank. Â It is about lying. Â It is about crime. Â It is about the ability of large, powerful private institutions to exploit the rules, undercut oversight, and avoid accountability.â€ť