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LIBOR rigging: Difference between revisions
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US courts, in acquitting Connolly and Black,<ref>{{citer|United States|Connolly and Black|2d Cir. 2022|No. 19-3806|}} </ref> had considered them to be matters of ''fact''. The English court considers contractual interpretation of contracts to be a matter of law. This seems right, though it leaves something out, which is ''what did the parties believe the rules to mean?'' | US courts, in acquitting Connolly and Black,<ref>{{citer|United States|Connolly and Black|2d Cir. 2022|No. 19-3806|}} </ref> had considered them to be matters of ''fact''. The English court considers contractual interpretation of contracts to be a matter of law. This seems right, though it leaves something out, which is ''what did the parties believe the rules to mean?'' | ||
Under the intellectual theory of the | Under the intellectual theory of criminal law, where ignorance, or misunderstanding, of the law is no excuse, that one was under a misapprehension goes only to mitigation and not liability, though — as we will see — in a market where plainly ''everyone'' shared an opinion, different from the judge’s one, about what the “LIBOR Definition” meant, this risks rendering the law “a ass”. | ||
There is also the odd spectre of the law of [[contract]] forming the backdrop | There is also the odd spectre of the law of [[contract]] forming the backdrop, and comprising some of the elements of a criminal allegation. This is rare. Usually, the five-oh stay well out of commercial disputes even where allegations of fraud are flying around, seeing it as a matter of civil loss between merchants perfectly able to look after themselves, and not one requiring the machinery of the state. | ||
[[LIBOR]], on whom the mortgage repayments of unwitting retail punters depend, made things a bit different. This is no private matter to be sorted out between gentlemen with revolvers. But nonetheless, still one must apply contractual principles, not criminal ones, to matters of contractual practice. | |||
====Everyone was at it==== | ====Everyone was at it==== | ||
A fun game, if you have twenty minutes, is to google the names of the {{plainlink|https://en.wikipedia.org/wiki/Libor|Seventeen LIBOR panel banks}} to see | A fun game, if you have twenty minutes, is to google the names of the {{plainlink|https://en.wikipedia.org/wiki/Libor|Seventeen LIBOR panel banks}} to see which of them were ''not'' somehow implicated in so-called “LIBOR rigging”. | ||
If you haven’t got twenty minutes, then the WSJ’s brilliant {{plainlink|https://graphics.wsj.com/libor-network/|spider network}} interactive graphic will give you the answer in an instant. | |||
''Everyone'' was at it. | |||
Either (a) there was a colossal conspiracy at which everyone was trying to rip off the general public for personal gain and, since their efforts would naturally cancel each other out, probably failing or (b) ''this is how everyone understood to the LIBOR system to work''. It might not be edifying, but employees have fiduciary obligations to their shareholders, and if everyone acts according to those fiduciary obligations — or even their own personal self interests — the selfishness cancels itself out. This is ''exactly'' the logic of Adam Smith’s [[Free market|invisible hand]]. | |||
=== The “LIBOR Definition” === | === The “LIBOR Definition” === | ||