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.

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Photo - EG Focus