Well, we knew the invisible hand was attached to someone, but good lord, the panic that ensued when our political establishment realised the flimsy curtain could be dropped at will, was illuminating.
Up until this scandal was delivered by US investigation, the *Libor rate was the London Interbank lending rate, the rate banks borrowed money from each other.
It wasn’t in anyone’s interest for the world to have a worrying headline rate for the borrowing between banks, not after the financial crisis had already given clues to the state of things. The government certainly felt the rate should be lower in those months post RBS clusterfuck. Banks, so far Barclays is named, but the list of those involved is long, submitted false rates and it looked like British banks were borrowing at rates which indicated health. And no one noticed apart from everyone. Murdoch owned Wall Street Journal had already investigated and the IMF seemed more than aware of the Libor Fix in this global stability report. That we could be alerted to it was a shock to our establishment.
Orchestrated lies underpinned a rate that covered markets worth 3-400 trillion. It turned out significant changes in the rate Barclays offered had followed conversations between Paul Tucker of the Bank of England and Bob Diamond, Barclays overpaid cowboy hero, and after days of Reservoir Dogs style face off with everyone firing at each other and threatening to bring the whole show to a halt, Labour and the Tories settled on tribal political incompetence in panto format as a deflection tactic. Unaware that only works on a minority of the domestic audiences and then only temporarily. Empty tribalism protecting banks, their default position since 2008.
The relationship between politics and media is on trial, and a US investigation has squarely announced the narrative of City of London as root of all financial corruption, so the relationship between finance and the British political establishment is also on trial. As a UK/US led model of capitalism comes to an ugly and undignified end.
The JP Morgan case, with its own handy London Whale, rumbles on and the world is alerted to the presence of an available pre-crash toilet in London. Britain has more or less woken up to the fact that we didn’t nationalise banks, they privatised us as a response to the crisis they caused, and their sacrifice is now politically appealing whether you are over the Channel or the Pond. Our Oil Major faces an uncertain future, and our pharma gaining a reputation akin to our banks. Brittania does not rule the waves now.
It has been agreed that MPs will have a chat about banks, and we are all moving our money wondering what will be rolled back to pay for the resulting bail outs, which of us will be demonised and how? By the way, I’ll leave my I told you so for the end of the year, when everyone is examining why and how our political parties pursued deleveraging by stealth on behalf of banks instead any attempt at economic recovery…
Now we are a bigger problem than the Euro and the Greek Exit combined. How many days till the Grexit now? Surely they must be nearly ready…