Very long. Better than ever. My heart belongs to Matty.
Everything Is Rigged: The Biggest Price-Fixing Scandal Ever
All of these stories collectively pointed to the same thing: These
banks, which already possess enormous power just by virtue of their
financial holdings – in the United States, the top six banks, many of
them the same names you see on the Libor and ISDAfix panels, own assets
equivalent to 60 percent of the nation's GDP – are beginning to realize
the awesome possibilities for increased profit and political might that
would come with colluding instead of competing. Moreover, it's
increasingly clear that both the criminal justice system and the civil
courts may be impotent to stop them, even when they do get caught
working together to game the system...
The banks found a loophole, a basic flaw in the machine. Across the
financial system, there are places where prices or official indices are
set based upon unverified data sent in by private banks and financial
companies. In other words, we gave the players with incentives to game
the system institutional roles in the economic infrastructure.
Libor, which measures the prices banks charge one another to borrow
money, is a perfect example, not only of this basic flaw in the
price-setting system but of the weakness in the regulatory framework
supposedly policing it. Couple a voluntary reporting scheme with
too-big-to-fail status and a revolving-door legal system, and what you
get is unstoppable corruption.
You think banking has subjective opinions, arbitrary definitions and self serving financial incentives underlying the system?
