Lord Acton may have been right and corruption is really a function of power. But the seemingly endless parade of banking scandals in recent months suggests that money is every bit as corrosive.
Last week, the British bank Barclays provided more compelling evidence when it agreed to pay $453 million to U.S. and British authorities to settle allegations that it manipulated key interest rates — and the Barclays settlement is just the tip of the proverbial iceberg of this scandal. Plainly, the system of financial regulations needs reassessment, and with it, fundamental assumptions about the role of financial institutions.
Barclays was charged with manipulating the London interbank offering rate, or Libor, the rate that is used to benchmark 10 major currencies and 15 borrowing periods, and an estimated $360 trillion worth of loans and financial contracts around the world each year.