There are a few metrics that are best-suited to financial obscurity - and when they emerge into common parlance, I get nervous.
In the bad old days of 2007 and 2008 at 11 am UK time each day we’d wait with mounting anticipation for the London Interbank Offered Rate (Libor).
Queues formed outside branches of Northern Rock, while HBOS, RBS and Lloyds teetered on the edge of unsustainability and we (foolishly) looked to Libor to tell us quite how bad things were.
That period of worrying about Libor ended with the collapse of Northern Rock, the bizarre takeover of HBOS by Lloyds and the subsequent part-nationalization of both Lloyds and RBS.
Now Libor is back in the spotlight and it’s making me just as nervous as last time around.
The financial crisis already turned much of the UK population against bankers. Just look over June’s financial pages for a rogues’ gallery of deception, selfishness and general bad behavior.
Mis-selling of interest-rate swaps to small businesses; (on top of the recent multi-billion pound payment protection insurance scandal); JPMorgan’s $5 billion “London Whale” loss; Kweku Adoboli of UBS granted bail over alleged unauthorized trade that lost $2.25 billion; Jerome Kerviel of SocGen takes to the appeal court in Paris over the 4.9 billion euros ($6.2 billion) loss related to his bets on the futures market in 2008; Bernie Madoff sentenced to 150 years for his Ponzi scheme; Texas banker Allen Stanford gets 110 years for a fraud worth $7 billion.
That was a selection of reports, from last month alone!
What worries me about the Libor manipulation debacle is that this could be the “Leveson moment” for the banking industry - the final straw that unites disparate political and interest groups against bankers once and for all.
Barclays almost won over the public. They didn’t need a bailout and Bob Diamond almost drew a line under the self-flagellation years with his “the period of remorse and apology is over” speech. Except that now he has to start apologizing all over again.
The technical term for this is: major fail.
Meanwhile the coalition is struggling to keep a united front and this is a great opportunity to unite against a common bogeyman and curry favor with the electorate. Hence over the weekend David Cameron ordered an independent review into interbank lending rates. And as you’d expect, the opposition has to be seen to be even more outraged so Ed Miliband goes even further, with calls for a public inquiry into banking culture.
As more banks are implicated, demands to rein in the industry will only grow louder. Looks like the banks have finally succeeded in chopping off their collective noses to spite their faces. All over Libor. What a waste.
Twitter: @Beccy Meehan