IN THE bad old days of 2007 and 2008, at 11am each day, we’d wait with mounting anticipation for the London Interbank Offer Rate (Libor).
Queues formed outside branches of Northern Rock, HBOS, RBS and Lloyds teetered on the edge of unsustainability, and we (foolishly) looked to Libor to tell us quite how bad things were.
That period of worrying about Libor ended with the collapse of Northern Rock, the bizarre takeover of HBOS by Lloyds and the subsequent part-nationalisation of both Lloyds and RBS.
Now Libor is back in the spotlight and it’s making me just as nervous as last time around.
The financial crisis already turned much of the UK population against bankers. Just look over June’s financial pages for a rogues gallery of deception, selfishness and general bad behaviour.
Mis-selling of interest-rate swaps to small businesses in addition to the recent multi-billion pound payment protection insurance scandal; JPMorgan’s $5bn London Whale loss; Kweku Adoboli of UBS granted bail over alleged unauthorised trade that lost $2.25bn; Jerome Kerviel of SocGen taking to the appeal court in Paris over the €4.9bn loss related to his bets on the futures market in 2008; Bernie Madoff’s brother admitting his part in the Ponzi scheme; Texas banker Allen Stanford getting 110 years for his $7bn fraud.
And that was a selection of reports from last month alone.
What worries me about the Libor manipulation debacle is that this could be the Leveson moment for the banking industry – the final straw that unites disparate political and interest groups against bankers once and for all.
Barclays almost won over the public. It didn’t need a bailout and Bob Diamond almost drew a line under the self-flagellation years with his “the period of remorse and apology is over” speech. Except that now he has to start apologising all over again.
Meanwhile the coalition is struggling to keep a united front and this is a great opportunity to unite against a common bogeyman and curry favour with the electorate.
Hence over the weekend David Cameron ordered an independent review into interbank lending rates. And as the opposition has to be seen to be even more outraged, Ed Miliband has one-upped him with calls for a public inquiry into banking culture. As more banks are implicated demands to rein in the industry will only grow louder.
It looks like the banks have finally succeeded in chopping off their collective nose to spite their face, and all over Libor. What a waste.
Louisa Bojesen is a CNBC anchor. Follow her on Twitter @louisabojesen