Barometer of fear: an insider's account of rogue trading and the greatest banking scandal in history

337 Pages·2017·2.875 MB·English

by  Stenfors, Alexis

BAROMETER

OF
FEAR

BAROMETER

OF AN INSIDER’S ACCOUNT OF
ROGUE TRADING AND THE GREATEST
FEBANKING SACANDAL IN HRISTORY
ALEXIS STENFORS
Zed Books
LONDON
Barometer of Fear: An Insider’s Account of Rogue Trading and the
Greatest Banking Scandal in History was first published in 2017 by
Zed Books Ltd, The Foundry, 17 Oval Way, London SE11 5RR, UK.
www.zedbooks.net
Copyright © Alexis Stenfors 2017
The right of Alexis Stenfors to be identified as the author of this work
has been asserted by him in accordance with the Copyright, Designs
and Patents Act 1988.
Typeset in Haarlemmer by seagulls.net
Index by John Barker
Cover design by Alice Marwick
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system or transmitted in any form or by any
means, electronic, mechanical, photocopying or otherwise, without
the prior permission of Zed Books Ltd.
A catalogue record for this book is available from the British Library.
ISBN 978-1-78360-929-1 hb
ISBN 978-1-78360-928-4 pb
ISBN 978-1-78360-930-7 pdf
ISBN 978-1-78360-931-4 epub
ISBN 978-1-78360-932-1 mobi
CONTENTS
Acknowledgements vii
Abbreviations ix
Introduction: ‘It’s a misunderstanding’ 1
1. The barometer of fear 17
2. ‘Why did you do it?’ 56
3. Superheroes and beauty pageants 70
4. The LIBOR illusion 107
5. The value of secrets 154
6. Conventions and conspiracies 187
7. Rotten apples 235
8. The perfect storm 275
Glossary 287
Notes 293
Bibliography 299
Index 314

ACKNOWLEDGEMENTS
Maria, I cannot thank you enough for your endless support,
encouragement and optimism with this project ever since I
scribbled down those first few sentences in February 2009.
‘Skriv boken!’ were two words that meant a lot to me during the
writing process. It has been a rocky ride and, yes, I wish I had
chosen a somewhat different path. Rebecca and Magdalena,
thank you for being such wonderful daughters. I am so happy
to have been given the opportunity to be a more present father
since you were eight and six.
Ian Ryan, many thanks for getting me into the habit of
taking mental and written notes of important events, and
for enlightening me about the difference between law and
morality. Ken Barlow, thank you for motivating me to explain
things I take for granted. You have been a great editor and
listener throughout this project. Judith Forshaw, thank you for
the copyediting and your love of language.
I am also grateful to many of you on the trading floors across
the world, whether still physically there or in memory alone.
vii

ABBREVIATIONS
ACI Association Cambiste Internationale
BBA British Bankers’ Association
BBAIRS BBA Interest Rate Settlement
BIS Bank for International Settlements
CDO collateralised debt obligation
CDOR Canadian Dollar Offered Rate
CDS credit default swap
CEO chief executive officer
CIA Central Intelligence Agency
CIBOR Copenhagen Interbank Offered Rate
CME Chicago Mercantile Exchange
CPI Consumer Price Index
CRS cross-currency basis swap
ECB European Central Bank
ERM Exchange Rate Mechanism
EU European Union
EURIBOR Euro Interbank Offered Rate
FBI Federal Bureau of Investigation
FCA Financial Conduct Authority
FIBOR Frankfurt Interbank Offered Rate
FRA forward rate agreement
FSA Financial Services Authority
FX foreign exchange
GDP gross domestic product
HELIBOR Helsinki Interbank Offered Rate
ix