I have every reason to believe that Liam Vaughan’s & Gavin Finch’s book “THE FIX” serialised in the Sunday Times is a riveting read – a guinea a minute! I cannot wait for Santa to send me a copy! I am sure the intrigue over LIBOR encapsulating the political corridors of power, the ineptness of the FSA, the influence of Sir Mervyn King, the then Governor of the Bank of England on the demise of Bob Diamond and the whole squalid banking episode involving copious managers and dealers in several banks, will be fascinating.


However there is a big ‘BUT’, which not even having read the book, which I am confident has been brilliantly researched, is indisputable. First and foremost how on earth was a trade association – the BBA, however august a body – allowed to police, price or mediate on a day to day basis loans which at one time totalled $500 trillion? Spurious data was collated daily, involving anything from 7-14 banks of varying credit worthiness, when the interbank market by the end of 2008 had become virtually moribund or non-existent! The system was dangerously flawed! No one condones bad behaviour, but LIBOR was a total anachronism. The system of calculation has of course been improved, but loans of that magnitude should surely not be calculated on the supply of cash from a wholesale market that lacks liquidity for maturities further than a month.


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