Читать книгу The Fix - Vaughan Liam - Страница 5

There were four of us at a table by the bar, eyeing each other with suspicion: two reporters, a highly paid derivatives trader in his early thirties, and a lawyer who had cautiously brokered the meeting. We'd just written a story about how the trader and a handful of his colleagues had been sacked, and he was incensed. His reputation was ruined, and he was aggravated by what he saw as the fundamental ignorance of the press. Did we even understand what Libor was? Did we understand what Libor had become?

On that chilly afternoon in February 2012, at a near-empty hotel bar in central London, the word “Libor” had not yet entered the public vernacular. In the world of finance, it was common. Libor was the name of a benchmark interest rate, one that was both mundane – it was just a measure of how much it cost banks to borrow from each other – and extraordinary. Libor was in everything, from mortgages in Alabama to business loans in Liverpool to the hundreds of billions of dollars in bailout money given to banks during the financial crisis. It was sometimes called the “world's most important number”, and the trader sitting across from us was accused of trying to manipulate it.1 From his body language it was clear he didn't want to be here, but he was desperate. So were we. We didn't even know his name.2

“Why do you need to know that?” he snapped when we asked. He had heavy bags under his dark, narrow eyes. All we needed to appreciate, the trader insisted, was that Libor wasn't what we thought it was. “There are no rules,” he said, avoiding eye contact. “There never have been. This is all a fucking joke.” When we pressed him for specifics, he clammed up. After the second round of drinks arrived, we tried a different approach. What was it we didn't understand?

The trader shook his head impatiently. Discussing Libor with colleagues and counterparts was as much a part of life on the trading floor as debauched nights out and crude language, he said. It had been going on forever and was widely condoned by management. But it had gotten more complicated than that, he continued. Libor had broken down. It was supposed to be a measure of how much lenders paid each other to borrow cash, but since the crisis, banks no longer lent to each other at all. Libor had become a fictional construct, dreamed up each day in the minds of a group of bankers with a vested interest in where it was set. The world's most important number was a fraud.

After an hour and a half, the trader relented and gave us his name. We asked if we could meet again and struck a deal: If we promised never to mention our meetings in our articles, he said he would guide us through the secretive, close-knit world of derivatives trading – a rarefied ecosystem where mathematically gifted young men bet billions of dollars of their employers’ money on movements in complex securities few people understand, then come together in restaurants and clubs in the evenings to enjoy the spoils.

The party was ending fast. A few days earlier, the first official document alleging Libor manipulation at a group of major banks had leaked. The affidavit filed by antitrust authorities in a court in Canada was light on details and, beyond a few brief news items, attracted little interest from the mainstream media. Still, we were intrigued. One of the more shocking aspects of the case was that the traders involved worked for the very banks whose recklessness had helped bring the global financial system to its knees in 2008. We had listened to kowtowing executives from bailed-out behemoths like UBS, Royal Bank of Scotland and Citigroup tell the public how they had reformed. If the Libor allegations were true, rather than learning their lesson, the banks were behaving worse than ever.

Six traders and brokers were named in the Canadian document, but the individual who was pulling the strings – the kingpin at the center of the conspiracy – was referred to only as Trader A. This was tantalizing. How had he done it? How had one man managed to shift one of the central pillars of the financial system in the years when the banking authorities were supposedly at their most vigilant? And what kind of individual would have the chutzpah to even try?

At the bar in London, before we parted ways, we asked the trader one final question: “Who is Trader A?”

“Pretty sure that's Tom Hayes,” he said. “He's just some weird, quiet kid who completely owned the market before he blew up.”

By the summer of 2012, Libor was front-page news. In June, Barclays became the first bank to reach a settlement with authorities around the world, admitting to rigging the rate and agreeing to pay a then-record £290 million ($355 million) in fines. The British lender avoided criminal charges thanks to its extensive cooperation with the investigation, but the fallout was devastating. The scandal coincided with the eurozone debt crisis and a renewed period of seething disdain for the banking sector. News bulletins cut from riots in Athens and Occupy Wall Street protests in New York to transcripts of traders calling each other “big boy” and agreeing to defraud the public for a “bottle of Bollinger”. Within a week, Barclays's charismatic chief executive officer, Bob Diamond, had been forced to resign, and the reputation of the Bank of England, which was accused of being directly involved in the U.K. lender's behavior, was in shreds.

Barclays bore the worst of the public opprobrium, but it wasn't alone. Swiss lender UBS settled with the authorities in December, followed quickly by taxpayer-owned RBS, Dutch bank Rabobank and interdealer brokers ICAP and RP Martin. To date, about a dozen firms and more than 100 individuals have been implicated from all over the world. In an era defined by the breakdown in trust between banks and the rest of society, Libor has confirmed people's worst suspicions about the financial system: That behind closed doors, shrouded in complexity and protected by weak and complicit regulators, armies of bankers are gleefully spending their days screwing us over.

The reality is both more complex and more shocking than that. The picture that emerges over thousands of pages of public and leaked documents and hundreds of interviews we conducted – with the traders and brokers involved in the scandal, the regulators and central bankers who failed to curb them, and the small, tenacious band of U.S. investigators who ultimately brought them to account – is of a system in which manipulation was not just possible but inevitable. Everyone must take their share of responsibility: the bank executives who fostered a culture where making money trumped all else; the authorities too weak or unwilling to ask awkward questions; and the governments, giddy on tax receipts, who ushered in a style of laissez-faire regulation whose disastrous effects are still being felt today.

At its heart, though, this is a story about a group of traders and brokers who found a flaw in the machine and exploited it for all it was worth. Despite their actions, the men who shared their stories with us are not one-dimensional hucksters unburdened by a conscience. For the most part, they are smart, likeable men – and they are all men – who love their children and cry at sad movies and who somewhere along the way convinced themselves that responsibility for their behavior lay with the system rather than themselves.

As we were putting this book together, the doping allegations against Tour de France legend Lance Armstrong were emerging. The parallels were striking. Within the closed ranks of both banking and cycling, the bounds of what constituted acceptable behavior had diverged over time from the rest of society, cleaved by a heady mix of testosterone, competition, groupthink, lax oversight and skewed incentives. Both worlds also had their antiheroes – individuals who, through sheer will and force of personality, went further than anyone else, dragging behind them an entourage of enablers and co-conspirators.

In the case of Libor, the antihero is Tom Hayes: a brilliant, obsessive, reckless, irascible math prodigy who transformed rate-rigging from a blunt instrument into a thing of intricate, terrible beauty. A socially awkward misfit in his early years, he found his calling the moment he walked onto a trading floor, where the idiosyncrasies that had dogged him his whole life became assets. They made him a fortune before they sealed his downfall. This is his journey. This is the story of Trader A.