The rotten heart of finance
I read things like this and by fixing LIBOR they're treating a symptom rather than addressing the cause.My belief--and many seem to disagree with me on this whenever I've brought it up before--is that we erred in allowing investment banks to incorporate.IMHO investment banks need to act like law firms: as partnerships with unlimited liability. Currently there is no incentive to not pervert the system and manage risk because:- no one is going to jail for criminal acts committed in these financial crises (eg loan documentation fraud and illegal foreclosings in the subprime fallout);- there is no financial incentive to act responsibly because if you go bankrupt this year last year's bonus is already banked;- central banks have been perverted into being welfare for investment bankers as a so-called "lender of last resort". Ostensibly they are ensuring the function of the financial system. In practice they are giving investment banks an unhealthy appetite for risk. Banks and funds need to be allowed to fail; and- governments are complicit in this.