Bank regulation carries lessons for EU’s budget battle

EU leaders would do well to reflect on the Libor scandal.

The history of how European investment banks manipulated the London Interbank Offered Rate, Libor, is not one from which regulators emerge with much glory. True, those regulators in the United States, the UK and Japan are now dishing out punishments, with the banks forced to settle for hundreds of millions of euros. But they are only belatedly making up for lost time. What is striking about this particular version of casino capitalism is that the roulette wheel was allowed to go on spinning for such a long time, for Barclays, UBS and the Royal Bank of Scotland (RBS). The worst of the Libor manipulation was, we are now told, between 2005 and 2009. The UK’s Financial Services Authority said yesterday that RBS traders had manipulated the Libor between 2006 and 2010. For at least five years, these traders were betting on events whose outcome they could influence. Hard, in some respects, to distinguish them from the betting syndicates in Singapore that, we learned this week from Europol, have been fixing so many football matches in Europe. But who regulates these regulators?

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