My most recent column in the French daily paper Le Monde : Le scandale du Libor, c’était en 2008. Translated from the French by Tim Gupwell.

When the LIBOR affair first broke in April 2008, the press comments were laconic to say the least. Last month, when the fire that had been smouldering flared up again with the conviction of Barclays for having manipulated the rates that govern the loans (in dollars) that banks contract amongst themselves, we saw media fireworks. At the time Barclays was one of the 16 banks (which number 18 today) responsible for submitting the data which allows the rates to be calculated.

An event which had led to little more than raised eyebrows in the spring of 2008 is now rocking the very foundations not only of the City but also of the entire world of finance. One has to wonder how the principle governing the dynamics of indignation works, when, at two distinct moments, public reactions to the same event can be of such differing orders of magnitude.

How could there be such indifference at the time when the facts emerged, and yet such a seismic shock over recent weeks that it lead to the resignation of three senior Barclays managers, as well as casting suspicion upon the candidate expected to take over as head of the Bank of England, and by association, on the British Government at the time. George Osborne, Chancellor of the Exchequer, declared that the facts revealed were “symptomatic of a financial system that elevated greed above all other concerns and brought our economy to its knees” and added that “fraud is a crime in ordinary business; why shouldn’t it be so in banking?”

The payment of a sizeable fine by Barclays (365 million Euros) ought to have been a way of turning the page on events that already dated back several years. All the more so since it is clear that, of the sixteen banks, Barclays was certainly one of the lesser offenders in the LIBOR affair, and had shown good faith by cooperating with the authorities, something which explains why it benefited from a 30% reduction in its fine in Great Britain.

It would be over-simplistic to talk of a simple communications exercise gone wrong since we are talking here about judicial decisions, but the regulators might have hoped that the end of the affair would be received by the public with the same sort of indifference they exhibited when the story first broke in April 2008. It was nothing of the sort. But why did it take four years for this public indignation to finally be ignited?

The explanation requires an allusion to what physicists would call a ‘non-linear’ effect: the very act of crossing the threshold suddenly causes the nature of a situation to change. One thinks of the Wizard of Oz (1900) of Frank Baum, where the accidental opening of a curtain leads to the discovery that the enchanted world (which could be seen as a metaphor for the American monetary system) is nothing more than an artifice produced by an old man pushing levers.

The thing that brutally lifted the curtain for the British and showed them in what light the LIBOR affair should be viewed, was of course the Rupert Murdoch affair.

The British were to make the discovery in 2011 that 4000 of them had had their voicemails hacked into by The News of the World, part of the gutter press belonging to the media empire of Rupert Murdoch, an American citizen of Australian origin. Amongst his victims were celebrities, members of the Royal Family, but also ordinary people: soldiers back from Afghanistan and survivors of the London bombings.

The affair came to prominence when the telephone of a murdered teenage girl was hacked into, and certain messages deleted, by a News of the World journalist, giving her closest family false hopes that she was still alive. The victims’ complaints never came to anything, because, at the time, Murdoch was also corrupting the police services who therefore attempted to cover the affairs up. As public opinion exploded into anger attention quickly switched to the revolving doors policy which existed between Murdoch’s cronies and members of the British Government. The relations between David Cameron, the Prime-Minister, and Rupert Murdoch himself, were undoubtedly a little too close for comfort.

Under this new light, Barclays short-sighted fraud, revealed in the explanations given by the FSA (Financial Services Authority), the British regulatory body, could no longer be seen as everyday dishonesty and instead came to be seen as just one more revelation amongst many others of an arrogant managing class, which does not trouble itself with rules, and organizes its affairs as it sees fit, whilst still maintaining a bare minimum of appearances

The LIBOR affair is the story of the devotee who has always accepted as gospel truth the preaching of his priest, but who suddenly stops believing everything he has heard because he has accidentally discovered that the beard his priest wears is false.

The question which needs to be asked now is the following: if the fall of the least guilty of the banks responsible for the LIBOR has already provoked such a dramatic collapse, what can we expect when the punishment reserved for the others is revealed?