Culture Wars: Rate Manipulation, Institutional Corruption, and the Lost Underpinnings of Market Conduct Regulation

48 Pages Posted: 12 Jun 2013

See all articles by Justin O’Brien

Justin O’Brien

Harvard University - Edmond J. Safra Center for Ethics; University of New South Wales (UNSW)

Date Written: June 13, 2013

Abstract

The investigations into the manipulation of the London Interbank Offered Rate (Libor) have raised significant questions about how conflicts of interest are managed for both regulated entities, contributing in benchmarks, and their regulators. An alternative framework is under consideration, coordinated by an International Organization of Securities Commissions taskforce, which builds on a review commissioned by the British Government. This paper argues that the approach is predestined to fail, precisely because it ignores the lessons of history. In revisiting the initial framing for market conduct regulation, the paper illuminates the lost normative underpinnings of the disclosure paradigm. By exploring the shadows of the past, it provides an essential guide for how to fix the legitimacy crisis engendered by the Libor scandal.

Keywords: Institutional Corruption, Libor, Conflict of Interest, Corporate Culture, Disclosure, James M. Landis

Suggested Citation

O’Brien, Justin and O’Brien, Justin, Culture Wars: Rate Manipulation, Institutional Corruption, and the Lost Underpinnings of Market Conduct Regulation (June 13, 2013). Edmond J. Safra Working Papers, No. 14, Available at SSRN: https://ssrn.com/abstract=2277172

Justin O’Brien (Contact Author)

University of New South Wales (UNSW) ( email )

Kensington
High St
Sydney, NSW 2052
Australia

Harvard University - Edmond J. Safra Center for Ethics ( email )

124 Mount Auburn Street
Suite 520N
Cambridge, MA 02138
United States

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