This is the story of a possible major miscarriage of justice that destroyed the lives of 37 people. Nineteen of them were convicted by the courts, nine of these ended up in prison. They were French, British, Italian, American, Greek, Japanese... The heaviest sentence was 14 years' imprisonment. The defendants, former traders who had earned tens of millions of euros, were regarded as perfect culprits whom nobody wanted to defend publicly. But the case against them for manipulating the Libor and Euribor interest rates used on the financial markets has started to collapse.
This was likely "a massive miscarriage of justice," said Labor MP John McDonnell. "People have suffered for the simple act of following instructions." Conservative MP David Davis agreed: "Like all miscarriages, in the early stages, the people who suffer from it start off as unpopular. Now it's our job to try and actually give justice back to the people who suffered most."
The latest act in this scandal took place on March 14, 15 and 18 before a London court of appeal. Tom Hayes and Carlo Palombo, two of the convicted traders who have served their sentences without ever ceasing to proclaim their innocence, were granted a rare reopening of their trial. The hearing lasted just three days and focused solely on technical issues. The judges are due to deliver their verdict in a few weeks. If they rule in the men's favor, the convictions of all the other accused could collapse.
This scandal unfolded on two levels. Beyond the potential innocence of the traders, the case also revealed the massive hypocrisy of Western financial authorities. At the heart of the major crisis in the autumn 2008, just after the collapse of Lehman Brothers, they knowingly manipulated Libor (London Interbank Offered Rate) and Euribor (Euro Interbank Offered Rate) in an attempt to put out the fire. In doing so, they most likely committed acts far worse than those of the convicted. Yet they were never charged.
The story began in autumn 2008. Panicked, banks lost confidence in each other and stopped lending each other money. Financial flows came to a virtual standstill. An obscure index drew the attention of the uninitiated: Libor. The London Interbank Offered Rate is the interest rate at which banks lend to each other. It is calculated almost by hand: At 11:00 am every day, a panel of banks informs the British Bankers' Association of the rate at which each is borrowing short-term cash. A weighted average is then calculated.
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