Posted by AzBlueMeanie:
I have been trying to find some good easy to understand reporting on the LIBOR scandal that most readers who have never even heard of LIBOR before now can follow and understand why this is yet another major financial scandal by wanker bankers, the masters of the universe who are "our betters."
The brilliant writers at The Daily Show did my work for me in the two video segments below the fold.
But first a brief primer from Ezra Klein Wonkbook: The financial system was systemically corrupt:
If you haven’t been following the Libor scandal, read Dylan Matthews’ great primer. But if you refuse to do even that, here it is in a few sentences: Libor is the rate at which banks lend to each other. It’s considered a measure of how safe the financial system is. As such, many banks use it as a benchmark to set the rate on the consumer debt you and I buy — they start with the Libor rate and then they add on whatever they think our risk is. But there’s something odd about Libor: It’s a rate the banks report themselves. And, in recent weeks, we’ve found out Barclays was lying about it.
In recent days, however, we’ve found out that it wasn’t just Barclays lying about it. Everybody was lying about it. Citigroup was lying about it. German banks were lying about it. We know a number of banks — though we don’t know exactly who — are talking to the feds about a settlement. We know HSBC, Deutsche Bank and JPMorgan Chase are being investigated.
On Wednesday, Lloyd Blankfein, CEO of Goldman Sachs, was asked about Libor. “The biggest impact is once more undermining the integrity of a system that has already been undermined substantially. There was this huge hole to dig out of in terms of getting trust back and now it’s that much deeper.”
Remember when Ronald Reagan said “trust, but verify”? Well, we’ve spent the last few years verifying. And when it comes to the financial system, the lesson is not to have too much trust.