The financial crisis had many perpetrators but now this is about to change. In future there will be one that gets blamed. Since 2007 we have been trying to find out, with little success, who is guilty for the mess we are in. Is it bankers, regulators or politicians? The story was complex and complexity hides the truth. According to today’s FT the combined regulatory penalty that 12 global banks now face as a result of manipulating Libor is $22 billion. Why didn’t we see fines and sanctions of this scale earlier? It’s my bet that the collateral damage would have carried out more than bankers and as they say turkeys don’t vote for Christmas. But now it’s different. With Libor you can see what’s been going on and so far there’s no one else to blame but bankers. What used to be a game played out between the big boys has questioned their honesty and integrity. Make no mistake this is a systemic issue. Heaven help the banks if the regulators find evidence of a cartel. You also have to wonder whether market rigging went a lot further. Who knows? If this behaviour was mirrored elsewhere it could affect just about every financial index and market. One thing is for certain it’s "drains up" time for regulators. Who could blame them? As some dealers would appreciate when there’s nothing to lose and a lot to gain you do it in size. More bodies down there? I for one wouldn’t at all be surprised.
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