Klein's Commentary

Go beyond the headlines

Financial Deception, Not Just for Wall Street Anymore

Were the financial mess in Europe not enough to make people wonder about the health of the global economy another banking scandal erupted, this time in the UK. Collusion on bank-to-bank lending rates first discovered at Barclay’s are now suspected across a number of other banks. Not only do these rates directly impact financial performance, they are supposed to be a bell-weather of economic activity. If the instruments of market temperature-taking are faulty then a host of undiscovered ills will erupt in crisis yet again.

JP Morgan’s escalating fiasco had CEO Janie Dimon chumming it up with the U.S. Congress, pleading ignorance, full of apologies and resolutions to never let it happen again. First it was $2 billion in trading losses, now they may run as high as $9 billion, or maybe “only” $5 billion. So far his talking point success (and deep banking connections in government – see ProPublica’s spot-on reporting)  staved off the ire of lawmakers and the threat of sweeping regulations. Win one for the PR department.

Will regulators in Europe or the U.S. ever make the fines fit the “crime”? If not, expect more of the same.

Back to “The Week That Was“.

Brian • June 29, 2012


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