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Certainly one of the greatest banking scandals of any age, the LIBOR fraud rocked the global financial industry. Manipulating interbank interest rates for almost two decades, the scale of the LIBOR deceit was staggering: 3 continents, 10 countries, 20 banks.

How could that happen on such a massive scale?

What LIBOR and other crises have shown is that banks need to enhance corporate governance measures. Most importantly, such incidents have led to a further prioritisation of governmental and supervisory agendas relating to the potential systemic implications of weak internal control systems, shifting the focus from the soundness of individual financial entities to the integrity and stability of the whole financial system. As Schwarcz maintains, the sheer perils financial supervisors have currently to cope with are attached to the risk “that a trigger event, such as an economic shock or institutional failure, causes a chain of bad economic consequences—sometimes referred to as a domino effect”. Systemic risk, indeed.

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