One bank caught trying to rig an interest rate may be tip of an iceberg. With an estimated $300 trillion in loans or derivative contracts around the world pegged to the interest rate, the scandal is again shaking faith in major international banking centers like Wall Street and London City.
Over the course of three odd decades, billions of dollars were lent to people who shouldn’t have been allowed to borrow lunch money. And now, there are losses in the trillions. The real question is, will the market finally be allowed to correct itself?
The HSBC scandal comes soon after reckless or deceitful behavior at Barclays and JPMorgan. The pattern lies in a bank culture that doesn't emphasize character enough. A survey of the industry shows why.
Barclays bank was caught manipulating global interest rates, known as Libor, in an act of deception over the bank's financial soundness. Preventing such dishonesty needs more than regulation.
When it comes to Wall Street, many of us suffer outrage fatigue and cynicism that nothing will ever be done to stop these abuses. The question is whether the unfolding Barclays scandal will provide enough energy to finally force a change.
The scandal at Barclays continues to grow as emails dating back to 2005 attest to a pattern of greed and corrupt business practices. What is not well known is what the final cost could be to the world's financial institutions, and these costs could be enormous.
The story of how Barclays tried to rig an interest rate benchmark called LIBOR, which cost CEO Robert Diamond his job today, may seem obscure. But it's the latest evidence of bankers taking every inch regulators leave to them.