As if it couldn’t be any a worse time to be a bank Barclays ends up in the news in a way that will ripple the entire banking community for a long while. The fine for trying to manipulate the key lending rate ($450M) isn’t that big in banking terms when you think they were massaging the rates on trillions of dollars of trade. As a result of the press coverage on the story the share price sank 15% today.
The Barclays scandal stems from transactions in two blocks. 2005-2008 and 2007 – 2009. On one hand increasing the rate to show inflated figures and then doing the exact reverse on the other and forcing the rate lower to show less damage. The libor rate dropped like a stone in 2009 to help the banks keep their heads above water, seems like people might have taken advantage, who knew?
Shame it took them three years to put all the pieces together and place the fine. Also it stems from varying methods of communication such as email and instant messaging. Now I don’t know how much traffic would get passed through the network gates of Barclays, or any other large bank, but realtime data analysis could play a key role into how this stuff is monitored. Well I say monitored but it’s hypothetical as Barclays is a private company.
Hold on, we’ve been here before….
Remember the Enron scandal? Did you know you can download the email dataset for analysis? Here you are… http://www.cs.cmu.edu/~enron/
So what about the Barclays email firehose? And when I say firehouse I mean communication handled in realtime. Large scale batch processing won’t help us too much now, it has to be on a per message basis.
Training the system recognise some triggers is quite easy really. Especially in this instance. Just start looking for triggers. The FSA gave some helpful handy hints:
“I’m like, dude, you’re killing us,” he said. His manager replied, “just tell him to… put it low”.
The phrases “just tell him” and “put it low” well there’s a good starting point if any is needed.
There’s nothing that can be done for verbal negotiation, we’ll never get to the bottom of that. But email and IM messaging? Hubbo messages? We should be able to monitor this stuff pretty easy really.