I am not for a moment thinking that Bob Diamond's leaving Barclays changes banking for good. That would be ridiculous. He's nothing more than an expensive sacrificial lamb this morning. A great many more people including at least one government minister (Lord Green) have to go, a whole new raft of ethics based regulation, backed by people with the proven ability to stand up for what is right who are needed on bank boards, split up banks and new regulation have all to happen before real change will be clearly evidenced. All that will take time.
This is however a moment to suggest how we will know that change has happened. This is a question I like to ask. If you can't imagine what change will look like there's no point thinking it possible.
In the case of banking - and the whole related financial infrastructure embracing the lawyers and accountants who are in my opinion as corrupt as the banks they serve - I think it's fairly easy to tell when change will have happened. That will be when they say "it was legal but we chose not to to do it because it was wrong".
So they wouldn't avoid tax.
And they wouldn't use tax havens.
And they wouldn't seek to help those trying to avoid and in so many offshore cases evade their taxes.
And they would not seek to hide their profits earned in the UK elsewhere.
And they wouldn't avoid the spirit of regulation.
Or avoid transparency when that option was available to them.
It's by their actions that we will know that banks have changed. I'm looking forward to seeing it, I hope in my lifetime. Trouble is, actuarially I've probably got at least 30 years to go. And we can't wait that long.
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the whole ‘it’s legal’ and ‘there’s no legislation that prohibits it’ mantra has been the biggest scam of the sorry state we find ourselves in.
whether it is RBS, PFI, HMRC deals etc, once you scratch beneath the surface you’ll uncover not just illgalities but outright criminality. a few days ago even Lib Dems like Paddy Ashdown was telling the nation on Newsnight (echoing the Tory and City line) that there is no criminal law against LIBOR rate fixing but thanks to bloggers like yourself that kept hammering on about the Fraud Act now everyone has come round to the fact that fraud is fraud!
why don’t we subject the RBS scandal to the same test? why don’t we subject the fraudulent PFI scandal (stitched up by staff seconded to the Treasury by the same companies that benefitted) to the same criminal investigation to see there is sufficient fraud to void those contracts that are threatening to destroy the NHS faster than the Lansley bill, and get our money back from the tax dodging companies that won those contracts? if the govt can renegotiate civil servants’ and doctors’ pension deals why can’t they negotiate the PFI deals or indeed void them? i’m certain that a criminal investigation will uncover fraud in those deals.
and what’s the point of Dominic Grieve, who, as the Attorney General is not just the chief prosecutor for the nation but also the Guardian of the Public Interest? and who is his Labour shadow?
Krugman blog February 4, 2011, ‘Another Kind of Financial Fragility’:
“Recent events have a lot of economists working hard at trying to determine the causes of financial fragility – the vulnerability of some economies, ours very much included, to disruptive shocks that cause credit and spending to freeze. But recent events have also highlighted another kind of financial fragility: the sensitive egos of powerful bankers. I’ve been calling this the Ma! He’s looking at me funny! syndrome; it’s quite something to behold. In a way, it sort of makes sense. Any leading player in the world of finance makes so much money that he more or less literally already has everything money can buy. If he cares about making even more money, it’s purely as a way of keeping score. And once you’re motivated mainly by considerations of prestige, you start to care more about whether the president is saying nice things about you than whether his actual policies are letting you off scot-free from any consequences of your industry’s sins.”
See also his ‘The Busts Keep Getting Bigger: Why?’ from July 14 2011 in the New York Review of Books for a history of ever-increasing banking failures.
Just one government official? You are being too kind.
Out with the whole lot, Labour, Conservative and Lib Dem….
What’s remarkable about all of these crises of late financial capitalism – the USA sub-prime mortgage crisis and the junk money made out of the CDOs, the RBS crisis that led to 2008 UK banking bail out , Europe’s big banks lending money to property developers with no proper controls, tax avoidance schemes that shifted tax away from our governments, the Barclay’s malpractice – all of it is a manifestation of ‘anything goes’, greedy Neo-Liberalism; leaving it to the markets while the state/ elected politicians remain deferential and negligent to big business, banking and finance. Even today Barclays’ shares are higher than yesterday and Bob Diamond is heading for an estimated payout package of circa 30,000,000 pounds. Incredible, Labour can move a lot further leftwards in their anger and still not reach the true levels of public disgust with all of this. Bob’s payout will cause continued angst – Diamonds live for ever!
Leslie, you should be right. However, I feel the participation/malfeasance in the LIBOR scandal from the previous Labour government will overshadow Barclay’s/Diamond.
Except all we know is that they began an investigation into it
Explain how that proves guilt?
What was the result of the investigation?
All I am seeing is the implication of BoE and Labour involvement from 2008.
Ed Balls, please note.
That’s wishful non- evidenced base thinking on your part
Unless you move to that basis soon expect deletion
Now that Bob Diamond has resigned it appears that Marcus Agius has been called back to his post again. How useful it is to be married to one of the Rothschild’s daughters in these circumstances.
http://en.wikipedia.org/wiki/Marcus_Agius
In the dodgy horse trading world of banking an inclination towards criminality may not be a condition of employment but to climb the career ladder (and qualify for the big buck bonuses) a Jack-the-lad persona has a clear advantage.
Ethical and moral decline in banking and financial services took root over twenty years ago and pitiable regulation guaranteed that it became endemic throughout the industry to the effect that if all those involved in fraud were to be successfully prosecuted the UK would need to build thousands of new prison cells.
Conversely the “contagion” has spread into the “establishment” an unquantifiable structure impossible to investigate/prosecute and as intangible and slippery as the Bilderberg Group and David Icke’s green dragons. Guilt in the mind of the British public is not guilt in the mind of the criminal court – not withstanding any number of interminable and lavish “inquiries”.
So little is likely to change except a few relatively innocent people will be hung-out to dry.
Could the Tax Havens be the Achilles heel?
Mr Diamond seems to be somewhat politically slanted towards the current gov.
Going by his testimony [sic].
Maybe he departed Barclays after being offered something more to his taste…..I wonder what will be the theme of events coming ?
http://www.zerohedge.com/news/live-webcast-bob-diamond-testimony-lieborgate
Meanwhile:
“More importantly, we noted something else – the transition at the top of the British Bankers Association: the organization responsible for compiling LIBOR submissions from member banks, and reporting what the daily Libor fixing is. Because in the second week of June, the BBA’s new head became… the former head of lobbying for none other than Morgan Stanley, Anthony Browne, a firm which itself was just caught red-handed manipulating rating agency “independent ratings” to benefit its bottom line (and which itself miraculous was downgraded by less than what the market expected in order to allow it to avoid several billion in collateral calls). And what did Anthony do at Morgan Stanley until June 12: he was head of Government relations for Morgan Stanley for Europe, Middle East and Africa and was previously an economic and business adviser to London Mayor Boris Johnson”
http://www.zerohedge.com/news/meet-anthony-browne-new-head-british-bankers-association
[…] Â We will know if we have succeeded because… ‘it’s fairly easy to tell when change will have happened. That will be when they say “it was legal but we chose not to to do it because it was wrong”. (13) […]