VW emissions scandal could be auto sector’s Libor

September 21, 2015

U.S. authorities say Europe’s biggest carmaker rigged emissions tests. The questions it raises recall bank rate-fixing scandals: how widespread the bad behaviour was, whether bosses knew, and who else was at it. Without rogue traders to blame, this could be harder to defuse.

Edward Hadas: Tom Hayes had the wrong standards

August 12, 2015

The convicted trader said he was like most people. They just “do their job” without asking whether it is honest or dishonest. He has a point. Society requires such upward ethical delegation and it usually works pretty well. Except, that is, in the financial world.

Deutsche’s attitude problem compounds Libor hit

April 23, 2015

The German bank is paying a record $2.5 bln to settle rate-rigging charges. To make things worse Deutsche Bank misled the UK regulator and others. That’s not smart in a highly regulated industry. With a currency market fine also pending, the reputational damage could grow.

Banks need to take the guesswork out of Libor

March 16, 2012

Probes into alleged manipulation of the benchmark interest rate have exposed a crucial flaw: sometimes it’s based on an educated guess. That won’t restore confidence in a figure that underpins $360 tln of loans and derivatives. A better approach would be to use real transactions.

Barclays’ Libor penalty goes beyond the financial

June 27, 2012

The UK bank has been fined $450 mln for trying to rig the interbank borrowing rate and CEO Bob Diamond is waiving his bonus. The reputational damage is bigger than the financial hit. And the full ramifications of the scandal aren’t yet clear - for other banks, or for Diamond.

Libor rigging looks like victimless crime

July 2, 2012

Barclays’ deception is bad for the banking industry, but the artificial quotes probably didn’t significantly distort borrowing costs or the economy. There may have been big losers in this scandal, but they aren’t likely to be found too far afield from other banks’ trading desks.

Barclays’ buck shouldn’t stop with Agius

July 2, 2012

The bank chairman’s resignation is appropriate because he didn’t act as a strong counterweight to CEO Bob Diamond. But the CEO was responsible for the culture at Barclays Capital, where the interest rate rigging took place, as well as other lapses which have made him a liability.

Diamond’s exit leaves Barclays at a crossroads

July 3, 2012

The UK bank’s CEO has resigned. In replacing him, the board faces a critical strategic decision. Picking an investment banker would be less disruptive. Going for a retail banker may show that Barclays thinks the universal model is past its sell-by date.

What if Barclays hadn’t lowered Libor submissions?

July 4, 2012

The bank certainly reduced its vulnerability by submitting lower rates mid-crisis. What would honesty have cost? Would Barclays have secured funds from Middle East investors, avoided nationalisation and protected bonuses? No one knows, but the timeline is suggestive.

Regulators have to tackle flawed benchmarks

July 11, 2012

Britain and the EU are considering official control of Libor and other indices. Criminal sanctions would help to deter future misbehaviour, though intervention could have unintended consequences. There’s no point pretending market barometers are a purely private matter.