Libor Elicits a Shrug and a Yawn

We’re so used to financial shenanigans that we’ve reached the “So what else is new?” stage.  From “The Spreading Scourge of Corporate Corruption,” Eduardo Porter, NYT:

“Perhaps the most surprising aspect of the Libor scandal is how familiar it seems.  Sure, for some of the world’s leading banks to try to manipulate one of the most important interest rates in contemporary finance is clearly egregious.  but is that worse than packaging billions of dollars worth of dubious mortgages into a bond and having it stamped with a Triple-A rating to sell to some dupe down the road while betting against it?  Or how about forging documents on an industrial scale to foreclose fraudulently on countless homeowners?

“The misconduct of the financial industry no longer surprises most Americans.  Only about one in five has much trust in banks, according to Gallup polls, about half the level in 2007. … Sixty-two percent of Americans believe corruption is widespread across corporate America.

“The inexorable rise of income inequality is also likely to encourage fraud, fostering resentment and undermining trust in capitalism’s institutions and rules.  Economic research shows that participants in contests in which the winner takes all are much more likely to cheat.  And the Unites States is becoming a winner-takes-all economy.”

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