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Economy

Sins Of The City: Bankers Caught Red-Handed - Again

Essay: As the Barclays "Libor-gate" financial scandal unravels, France's leading business daily says it's time London lawmakers and City bankers should stop lecturing continental Europe and take a good hard look in the

Really? (EG Focus)
Really? (EG Focus)
François Vidal

PARIS - It's the story of a habitual offender. Once again, finance was caught red-handed, just like the small-time delinquents who promise the judge never to do it again but are unable to control their own impulses. Only a few weeks after JP Morgan's billion dollar trading loss, Barclays is accused of organized fraud on one of the credit market pillars, the Libor.

Barclays, one of the main banks in the City (several other London institutions are also suspected) knowingly helped falsify the interest rate that is the baseline to most commercial transactions and financial products. This is market fraud, and the technical nature of the problem shouldn't hide its importance.

This "Liborgate," which has undoubtedly barely started, is one of the most serious financial scandals since the beginning of this scandal-rich crisis. Even if the financial stake is much lower, it is very similar to the subprime scandal because of what it reveals about the attitude of international finance. A world in which well-established companies can organize institutionalized fraud in order to preserve their interests, in contempt of those of their clients and of society as a whole. It is a universe where the end always justifies the means.

This is also proof that the City, so eager to lecture continental Europe on its banking, should take a look in the mirror. After this scandal, how can you explain to taxpayers who poured billions of pounds, dollars and euros into the financial system that it has learned from its mistakes? That its culture has changed?

Barclays C.E.O Bob Diamond will surely fall, like others did before him. But that won't be enough to fix the broken trust. The financial world has to be brought to heel because it is has no self-discipline. First through much stricter regulation that will incorporate market finance instead of placing it into an incontrollable no-man's land that cuts banks in half. Just as important is strengthened supervision. It is obviously impossible to put a regulator behind each banker. But it is urgent to instill a much deeper fear of regulators in the sector by punishing abuses much more harshly.

Read more from Les Echos in French.

Photo - EG Focus

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Ideas

How U.S. Airlines Are Doing Cuba's Dirty Work On American Soil

American and Southwest Airlines have been refusing to allow Cubans on board flights if they've been blacklisted by the government in Havana.

How U.S. Airlines Are Doing Cuba's Dirty Work On American Soil

Boarding a plane in Camaguey, Cuba

Santiago Villa

On Sunday, American Airlines refused to let Cuban writer Carlos Manuel Álvarez board a Miami flight bound for Havana. It was at least the third time this year that a U.S. airline refused to let Cubans on board to return to their homeland after Havana circulated a government "blacklist" of critics of the regime. Clearly undemocratic and possibly illegal under U.S. law, the airlines want to make sure to cash in on a lucrative travel route, writes Colombian journalist Santiago Villa:

-OpEd-

Imagine for a moment that you left your home country years ago because you couldn't properly pursue your chosen career there. It wasn't easy, of course: Your profession is not just singularly demanding, but even at the top of the game you might not be assured a stable or sufficient income, and you've had to take on second jobs, working in bars and restaurants.

This chosen vocation is that of a writer or journalist, or perhaps an artist, which has kept you tied to your homeland, often the subject of your work, even if you don't live there anymore.

Since leaving, you've been back home several times, though not so much for work. Because if you did, you would be followed in cars and receive phone calls to let you know you are being watched.

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