Two good articles about the recent Libor scandal. First, from Jonah Goldberg:
I wish my fellow conservatives could muster a bit more public disgust [in response to the recent Libor scandal]. There’s really no point in simultaneously talking about “leaving things to the market” and celebrating the rule of law if you’re going to respond to this kind of game-rigging with a yawn.
Moreover, as a political matter, staying on the sidelines almost guarantees that the problem will be made worse. The relentless push for more regulation and more oversight boards, commissions and agencies hasn’t done anything to curb such scandals. But making the relationship between government and business more interwoven and complex has entrenched the “too big to fail” mind-set. What’s required aren’t new regulations so much as relentless enforcement of the existing laws, without fear or favor.
As the Manhattan Institute’s Nicole Gelinas notes, despite several huge big-bank scandals — municipal finance manipulation at JPMorgan Chase, money laundering at ING, etc. — we haven’t seen any big banks go out of business for criminal transgressions. They’ve paid some big fines, but those costs are passed on to consumers, taxpayers and shareholders. “The answers to our problems are straightforward,” Gelinas writes. “When a bank egregiously breaks the law, it should run the risk of a criminal conviction’s throwing it out of business.”
Second, from Charles Gasparino:
The latest development in the Libor-manipulation scandal is that the banks weren’t really fixing the price of the key interest rate in total secret — U.S. regulators were aware of the sleazy activities at the time, and seemed to have done nothing…
In coming weeks, both Federal Reserve chief Ben Bernanke and Treasury Secretary Tim Geithner will inevitably discuss the mess when they appear before Congress…
If the right questions get asked, the American people will get a firsthand account not just about how much our government knew about the Libor mess, but also of the cozy, corrosive relationship between the nation’s big banks and the bureaucrats who are supposed to regulate them.