One senior executive at a major bank calls another, asking him to manipulate crucial data. It sounds like a financial scandal, and the whole affair grows even murkier when it emerges that the two men are apparently acting on the orders of the Bank of England and the Labour government of the day.
The revelation in the latest Panorama that the state may have been deeply implicated in market manipulation sounds scandalous. It contributes to the public sense that during the global financial crisis, the rich and powerful made and broke the rules as they saw fit. Yet this was no crime racket, for two simple reasons: first, the manipulation in question was not subject to regulation at the time; and secondly, the government was not trying to profit illegally. Still, no one can dispute that it does not look good, and will only add to popular suspicion of – and anger towards – institutions and individuals who seem to have got off scot free after almost crashing the world’s economy.
But now is not the time for an interminable exercise in hand-wringing for public consumption. The truth is that enforceable rules and regulations have been applied to the manipulations in question, and that those institutions since found guilty of transgressing have been fined billions of dollars and had executives sent to jail. Indeed, one of the men in a recording shown by Panorama was later imprisoned for agreeing to act on behalf of traders who did seek to profit.
Given that the right rules are now in place, what remains is for the rebuilding of public trust to continue. Best, then, that the Bank of England carry out its own stringent audit to ensure there are no more skeletons in the cupboard.