Understanding the LIBOR Scandal: The Historical, the Ethical, and the Technological

Journal of Banking Regulation, 2022

43 Pages Posted: 19 Sep 2019 Last revised: 1 Aug 2022

See all articles by Xing Huan

Xing Huan

EDHEC Business School

Gary Previts

Case Western Reserve University - Department of Accountancy

Antonio Parbonetti

University of Padua

Date Written: July 30, 2022

Abstract

This article examines the conception of banking regulation through the lens of the LIBOR scandal. The narrative of the scandal addresses the debate surrounding the public versus private view of banking regulation. Employing an analytical framework developed through reassembling prevailing regulation theories that is contextualized to the banking industry, we analyze the historical, ethical, and technological aspects of the LIBOR scandal and subsequent reform. We argue that the narrative of the LIBOR scandal represents a typical regulatory capture in the private interest view of regulation. However, the benchmark reform appears to concur with the recent paradigm shift towards the public interest approach to banking regulation that involves more intrusive and detailed supervision with a focus on structural bank regulation.

Keywords: banking regulation, financial innovation, financial system, regulatory capture

JEL Classification: N20, N40

Suggested Citation

Huan, Xing and Previts, Gary J. and Parbonetti, Antonio, Understanding the LIBOR Scandal: The Historical, the Ethical, and the Technological (July 30, 2022). Journal of Banking Regulation, 2022, Available at SSRN: https://ssrn.com/abstract=3449381 or http://dx.doi.org/10.2139/ssrn.3449381

Xing Huan (Contact Author)

EDHEC Business School ( email )

393 Promenade des Anglais
Nice, Provence-Alpes-Côte d'Azu 06202
France

Gary J. Previts

Case Western Reserve University - Department of Accountancy ( email )

Cleveland, OH 44106-7235
United States
216-368-2074 (Phone)
216-368-4776 (Fax)

Antonio Parbonetti

University of Padua ( email )

Via del Santo 33
Padova, 35123
Italy
+39 049 8274261 (Phone)

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