Jenkins seems perplexed by this (emphasis mine):
Some Barclays emails imply that traders, even before the crisis, sought to influence the bank’s Libor submissions for profit-seeking reasons. This is puzzling and may amount to empty chest thumping. Barclays’s “submitters” wouldn’t seem in a position to move Libor in ways of great use to traders. Sixteen banks are polled to set Libor and any outlying results are thrown out. Plus each bank’s name and submission are published daily.
It’s only puzzling if you didn’t read that Barclays traders wanted the bank to be an outlier—“preferably we get kicked out.” Why would they want to get kicked out of the measurement? Dealbreaker’s Matt Levine:
…if everyone else says 0.50, 0.51, 0.52, 0.53, 0.54, and Barclays was honestly going to be 0.52 and you throw out the high and low, then you get an average of 0.52 if they submit honestly, whereas if they submit 0.55 then you kick them out and get an average of 0.525.
Last week, the Journal edit page continued to minimize the banks’ Libor fiasco, calling it “a minor scandal” in the subhead, reiterating Jenkins’s “fudge” line, and writing that the “political circus” is “largely an excuse for politicians to beat up on ‘greedy bankers.’”
This is just a cynical defense of fraud:
The bipartisan outbreak of market purism in Parliament and the media is refreshing in one sense—never have so many, of such different political persuasions, argued so eloquently for the virtue of unadulterated price signals.
In defending banker con-artistry, the Journal forgets that marketplace corruption, among other things, wrecks the market itself.
The Journal ran an op-ed the same day by former Bear Stearns economist David Malpass—last seen here downplaying the possibility of a deep recession, that deftly shifts the focus to lawyers—on how the “world can’t afford endless litigation against the financial system.”
This morning, the paper runs another editorial shifting attention away from the banks and on to regulators. At least we can agree on its kicker:
If heads are going to continue to roll over Libor, they should also include those of Mr. Geithner and the rest of the regulators who let this slide.