Does Barclays scandal represent a new breaking point?
The multibillion losses recently incurred by JP Morgan was interpreted by many analysts as the biggest financial scandal since Lehman Brothers. Until Barclays came along. Is it now the biggest scandal to date? Dylan Matthews makes the case for this position in the Washington Post, because, he asserts, the Libor matter impacted more than the bank’s investors.
“Remember that JP Morgan scandal a few months back? That was mostly JP Morgan hurting itself. The LIBOR scandal was Barclay’s making money by hurting you. In the simplest terms, LIBOR is the average interest rate which banks in London are charging each other for borrowing. It’s calculated by Thomson Reuters — the parent company of the Reuters news agency — for the British Banking Association (BBA), a trade association of banks and financial services companies,” contends Matthews.
How far the scandal’s tentacles reach may not be known for months, but some are pointing to it as an example of the inherent faults in capitalism. Others believe that is reading too far into its meaning.
Samuel Brittan, a self-described defender oe f capitalist markets, evaluates what weakenesses are exposed by the latest financial scandal involving rate fixing at Barclays bank.
“What all forms of cronyism share is a passion for secrecy and a hatred of open discussion. I first saw this in the official attempts to stifle discussion of the possibility of UK devaluation before 1967, when it happened. But I came across it more recently when an otherwise intelligent head of one of the many EU banking bodies said to me in the deepest privacy that any break-up of the euro was unthinkable and undiscussable,” hwrites in the Financial Times.