OK, now I'm worried

I haven't been so far, not very much, but now I really am worried. My previous insouicance was pretty much based on a deep faith in markets working, despite their occasional hiccups, plus the thought that while there might need to be regulatory changes, those who would make such would know what they were doing.

I've still the faith in the markets but no longer really have much in the regulators. Take this:

That is clearly not the case:inter-bank loan rates are regularly higher than Libor, the official rate.

Now if that was said by some random politician or other axe-grinder we could just smile politely at the ignorance of the subject under discussion and move quietly on. But this isn't just some ignorant.
Sir Howard Davies, who is director of the LSE, was chairman of the Financial Services Authority, 1997-2003

This is someone who was one of the top regulators of the financial markets. From that very class of people we now rely upon to get us out of this mess and he makes a schoolboy howler.

Libor is not an official rate. It is simply a report of the rates at which banks are willing to lend to each other. That some banks will pay more than Libor is a given....for some of them are always going to be viewed as less reliable than others.

If we're relying upon people who don't know even these simple things about the markets they're regulating....well, yes, maybe it is time to get scared.

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