Three bankers were found guilty of manipulating global interest rates this week.
Jay Merchant, Jonathon Mathew and Alex Pabon were convicted for manipulating the Libor interest rate—bringing the total convicted bankers in the scandal to five.
But the scale of manipulation by the banks goes much further than five bankers.
Even after we bailed out the Royal Bank of Scotland (RBS) in 2008, it carried on rigging Libor for three years. Serious Fraud Office head David Green said the key issue in the case was “dishonesty”.
Corruption isn’t about a few dishonest bankers rigging the rules—capitalism is built to work in their interests.
Libor is used to set the international borrowing rate, from ordinary people’s mortgages to major investments.
We’re told it is set by “market forces”. In reality banks set it to boost their own profits.
Banks would submit borrowing rate estimates to the British Bankers Association, which would then set the Libor rate.
When a crisis hits, institutions pretend to undergo dramatic reforms. Sometimes a few bankers are even jailed to protect their system.
It’s good these social criminals have been convicted.
But to stop corrupt bankers ripping us off, we have to get rid of the rotten capitalist system they serve.