Three years ago this blog addressed the issue of (see here, in Portuguese) whether there should be a set of legal standards that would give guidance to financial regulators on how to put in place instruments designed to avoid things like the recent LIBOR scandal. Given its impact on all sorts of contracts in the economy and on parameters that influence many policies in public sector finance, greedy financial speculation can lead to diminished ability of different people to enjoy rights, sometimes fundamental rights — such as the right to education, when university fees go up; or access to health treatments, when budgets in social services are slashed; etc.
But the problem is not just the manipulation of one index — in the recent case, the LIBOR. Many other indices are often manipulated in connection with many speculative interests reflected in bets taken by many financial institutions in different financial markets. The comments by former regulator and now professor Bill Black in the video above (HT New Economic Perspectives) give some idea of how other indices have been, and continue to be, shaped by financiers in ways disgned to boost their own speculative interests and gains. See also comments by Robert Reich here (also available here) and the instigating post on the political dimension of banking practices and ‘culture’ here. [Update Aug. 16, 2012: See also the interesting piece on the “inherently political nature” of interest rates — here.]
One could easily conclude, as does the paper mentioned here, that more needs to be done on the part of jurists to aid regulators in tackling the whole issue of off-limits speculation and its impact on different markets, public finance parameters and on the enjoyment of fundamental and human rights by groups and individuals around the world.