UK banking: "a moral quagmire of almost biblical proportions"...

It has not been a comfortable weekend for the men in charge of some of the world's biggest banks. Barclays has been hit by a 290m fine for rigging interest rates...but that could be dwarfed by a series of global lawsuits, which could cost banks billions.... "Describing the problems in UK banking as "a moral quagmire of almost biblical proportions", Business Secretary Vince Cable says the government is taking urgent action, including creating a clearer separation between "casino-style investment banking" and retail banking on the high street. Ministers will this week begin a review into the Libor system under which banks lend to each other and Cable hints that US-style criminal sanctions, such as the threat of prison terms, could be considered against those who abuse it." [Guardian] http://www.guardian.co.uk/business/2012/jun/30/vince-cable-shareholders-bank-cheats

City of London photo: Stefan Rousseau/PA

Joseph Stiglitz: Nobel prize winner, former World Bank chief economist and author of the 'Price of Inequality' told CNBC: "The scandal that has broken out in the UK (Libor) illustrates one of the main themes, that a lot of inequality especially income at the top doesn't come from people really making our economy work better"... http://video.cnbc.com/gallery/?video=3000099914&play=1

Reuters: A scandal over the rigging of key interest rates could plunge the global banking industry into a legal morass for years, analysts said, as the head of Barclays fought to hold onto his job. http://uk.reuters.com/article/2012/06/29/uk-libor-banks-idUKBRE85S0PD20120629

Bloomberg Business Week: "Bank of England Governor Mervyn King said the “deceitful manipulation” of Libor reveals wider cultural flaws in Britain’s banking system, as officials warned bank chiefs need to rebuild trust. “Everyone now understands that something went very wrong with the U.K. banking industry,” King said at a press conference to present the central bank’s Financial Stability Report in London yesterday. “From excessive levels of compensation, to shoddy treatment of customers, to a deceitful manipulation of one of the most important interest rates, we can see that we need a real change in the culture of the industry."