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"Isn't it true that there has never been a major crisis that resulted from excessive exposures to what was considered risky, and that these have always resulted from excessive exposures to what was perceived as not risky?"
July 10 -
Federal Reserve Board Chairman Ben Bernanke rose to the defense of the New York Fed over its handling of reports as far back as four years ago that Barclays traders had been manipulating the London interbank offered rate.
July 17
When I hear about the Barclays Libor scandal, I can't help thinking of some poorly paid clerk sitting there and reporting, at 11a.m. London time, five days a week, for the last 40 years or so, the rate at which the bank he works for could borrow funds, were it to do so by asking for and then accepting interbank offers in reasonable market size.
And so can anyone blame him for tweaking that rate a bit, now and again, in order to make a trader colleague happier, and perhaps be invited out for a pint of beer, or two? Of course the clerk misbehaved, and did a bad thing, no question about it. But who of all those debating this issue can feel so sure about having the moral standing to throw the first stone?
And frankly, what were the losses for society? Some earned less interest, other paid less interest, some made speculative profits and other speculative losses, and it was all, in the long run, most probably a wash anyhow. I add and add and subtract and subtract. And I do not start to get even close to something comparable to the real financial losses the world has suffered from Potemkin triple-A-rated securities … or the losses it is about to suffer from having our banks dangerously overpopulate the remaining safe havens (because
No! As H.L Mencken prescribed in "
And following again another of suggestion by Mencken, this time from "
Per Kurowski was an executive director at the World Bank from 2002 to 2004. He writes the
