By Matthew Goldstein

There is an opaque financial market where pricing is determined by a cadre of Wall Street banks and private emails show that behind the scenes  many in the market don’t even believe in what they are doing.

The Libor price fixing scandal?  Sure. But what I’m talking about here is the market for the CDOs, which at the end of the day you can still argue did more harm to the world financial system than the allegations now emerging from the Libor scandal.

Don’t get me wrong: I am not defending the apparent misconduct by bankers to manipulate Libor, a benchmark interest rate for lots of commercial and leveraged loans. But it’s still not clear just what the big harm was in the Libor scandal.

One of the allegations is that banks worked together to manipulate Libor to keep the rate low during the financial crisis. Now maybe that helped the banking system, but it no doubt helped borrowers.

And remember, almost no one pays Libor.  That’s why in loan docs it always  says Libor plus–Libor is the floor rate in any loan.