I don’t buy the clamour for changing culture in banks as a panacea for banks’ wrongdoing. There are, there have been and there will always be immoral individuals committing crimes and defrauding others. The role of the State is to police these individuals and prevent their actions but not interfering with the culture of private organisations. The idea behind changing banks culture in essence means more government control over private activities. It is reminiscent of the culture shaping exercise initiated by the Nazis. Striving for the Utopia by indoctrinating the grassroots. Creating the perfect mix for the dictator to arise.
2. Libor scandal:
Scandals like the Libor rigging are nothing new. Similar scandals happened in any country, in any sector, in any industry, and in any company. If someone commits fraud or breaks the law, judges and tribunals should punish them. But we do not need more regulation or government intervention. No regulation, even the strictest one, can ever stop collusion. Nothing can guarantee that fraud will not happen again. It always will.
The real interest rating rigging scandal is the Bank of England and other Central Banks continually manipulating interest rates and therefore making worse off or better off specific sectors of the population. That is unrestricted, centrally planned, biased and unjust rigging of the general economy and so our individual pockets. Furthermore, politicians and regulators force and manipulate the entire economy to make it behave in predetermined ways which, again, benefit some and punish others. I have not yet seen politician, regulator or central banker resigning over such scandal.
3. Interest Rates Swaps scandal:
We need to reform the concept of miss-selling. The details are not clear yet but if, as it seems, some bankers within some banks did indeed force, lie or misled their customers in order to sell them an Interest Rate Swap, they must be punished. However, the concept of miss-selling is generalist, imprecise, far-reaching and misleading. It induces to blaming an entire sector instead of the actual wrongdoers.
IRS are not complex products. If interest rates go up banks pay you, if they go down you pay the banks (or vice versa). A quick look to Google would easily explain that.
Buyers need to assume responsibility for their decisions. Nanny State cannot and must not remove from individuals decision making and the responsibility it brings. This removal of individual responsibility for decisions is done directly in authoritarian states and subtly and indirectly in neo-socialist states such as the UK. The State must not save us from our own ignorance.