Mitigation Banking and Reputational Risk

Writing in the New Yorker about the London Interbank Offered Rate (LIBOR) scandal, James Surowiecki observed that "for decades, regulators and people in the financial industry assumed that banks' desire to protect their reputations would keep them honest. If banks submitted false LIBOR estimates, the argument went, the market would inevitably find out, and people would stop trusting them, with dire consequences for their businesses."