Libor: A New Dawn

What we know, after at least two really good books, endless reports and several prison sentences, is that the Libor scandal is only just beginning.

Nearly fifteen years after people first started to rig it — as far as we know — the trials are just getting underway. I am speeding through the book by David Enrich, the Spider Network, and also The Fix by Bloomberg journalists. It will be interesting to compare and contrast their stories, and see what Bloomberg have turned up in the time since the earlier one was written.

At the centre of both books is a naive British trader called Tom Hayes. Sentenced to an amazing 14 years in prison, he is fighting to clear his name.

What these books, and the trials, demonstrate, is that there is no name to clear. Tom Hayes fiddled the Libor. It is beyond reasonable doubt.

But he is a damaged, young and naive individual. He, perhaps understandably, believed his employers would look out for him if things went sour. They did not. To a man, they all wriggled and lied their way out of it.

Well the final reckoning is overdue. Now that the Old Lady of Threadneedle Street has herself been implicated, the gloves are about to come off. The Bank of England allegations are not new. But as United Airlines has found, tapes have a habit of focusing public opinion. Like the glass prism on Pink Floyd’s most famous album, nothing hits harder than video and audio. Internet chat conversations can be interpreted, played down, laughed off as a joke. But the human ear, like the human voice, is capable of understanding nuance. Most of us can tell a joke from a lie, and a lie from the truth.

Was anyone surprised that Bank of England was encouraging banks to lie about Libor? Not really. The only scandal here is the inevitable cover-up.

I owe it to Tom Hayes, and so do you, to see justice done. Not until there are trials of all the executives and managers, and the regulators around the world, will justice have been done. Tom Hayes has paid a heavy price for youthful exuberance. He could have had no idea how his actions would ripple through the markets around the world. But, as The Fix points out, this was a disaster waiting to happen. Libor rigging was not merely possible, it was inevitable, and it is a human tragedy that fate singled out Tom Hayes for punishment.

Hayes is not innocent. But he is not as guilty as they would want you to think. Answer this: if everyone in power wants you to look at the fall guy, what are they trying to hide?