Relaying The Reality

TOO BIG TO FAIL! These multinational banks had created an unnecessary hype about their name and fame. Little did we know that behind all this eminence, there was a black hidden face. Each of these business turks tried to establish their monopoly using unfair means.

Recently, in an investigation carried out by the Financial Services Authority, the big bank Barclays has been caught in a scandal for manipulation of LIBOR. LIBOR ( London Inter- Bank Offered Interest Rate) is an indicator of the confidence level amongst the British banks. Apart from just the banks in UK, many variable rate investments are pegged to the LIBOR. During the low growth period in 2007-09, it was found that Barclays had faked the interest rate so as to show that their financial health was not shaky despite the dwindling economic affairs.
The process goes on like this. The British Bankers Association gets a feedback from the bank about the estimates of inter- bank lending rates regularly. This organization then fixes the rate of interest. However, as declared in the probe, the Barclay’s staff would meet up with the traders and coax them to record lower estimate. They did this to avoid any kind of financial stress in the midst of the global financial crisis. The unfortunate part of this whole scandal was that the staff of the bank treated it as “Accepted Culture” of the firm. Thus, this is one of the most serious scandals in the banking sectors where the people involved in the crime don’t consider themselves wrong. To the regulators’ surprise the top executive at that time, Mr. Robert Diamond claims that he was unaware about the deals that were being signed off between the traders and the staff.They are ignorant of the fact that their manipulation risked the security of financial assets worth millions. How can they repay for the trust amongst the investors, which they have complacently impeached? Even the top notch banks fail to secure the common man then who are they supposed to turn to?
Long back,
Barclay’s bank released an amazing slogan which has also come in our common parlence- “ Fluid in Finance”. The fluid is no longer flowing rather has become unusually static. The misconduct has not only lead to their financial loss but also a loss they won’t be able to recover- the confidence of the people.