“An epitaph for an age of irresponsibility”, is how the Chancellor, George Osborne, described the Barclay's Libor-fixing scandal in the Commons last week. It was, he went on: “symptomatic of a financial system that elevated greed above all other concerns and brought our economy to its knees”. If even a Tory Chancellor has finally got it, can we expect real action to sort out Britain's banks? Don't hold your breath.
The manipulation of Libor – the London Inter-Bank Offered Rate - has been common knowledge in financial circles for years. The Economist has been writing about it at least since 2008. The idea that the British Bankers Association didn't know what has been going on is laughable. Every barrow-boy in the City knew the banks had been fiddling their borrowing costs in order to disguise their distress after Lehman Brother's crashed in 2008 and interbank lending almost froze. By manipulating their borrowing costs, banks like Barclays were able to convey the impression that they were in less financial stress than they actually were.
