Sir Mervyn and money-fixing

Is manipulating interest rates really as shocking to the Chancellor and the Governor of the Bank of England as they make it out to be? The Libor and Euribor fixing scandal has shown several bankers at it, yet this weekend there were suggestions that at least some of these bankers thought that the regulators, the Bank of England and even the Treasury were aware of the scam – and had a shared interest in keeping the official borrowing rate down so as not to spread panic. This reminds us what an extraordinary situation the Old Lady of Threadneedle St finds herself in.

On Friday, Governor Mervyn King lambasted banks and bankers for being ‘shoddy’ and ‘deceitful’ over the Libor scandal. The BoE is not directly responsible for Libor (though this article [http://specc.ie/LY9nXJ] from Robert Peston suggests it’s not entirely divorced from it, either). Still, it’s slightly surreal when the central bank chief sounds as though he’s only just been introduced to a business culture in which he was enmeshed for over a decade.