Fresh news of Barclays and other high street banks misselling financial products draws condemnation from none other than the governor of the Bank of England.
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This week’s news that Barclays Bank spent several years trying to manipulate the London Interbank Offered Rate, or Libor – the average borrowing rate for banks, calculated each day and used to price innumerable financial services worldwide – has been greeted with widespread disgust.
Yesterday, George Osborne described it as “a shocking indictment of culture at banks like Barclays in run up to the financial crisis“, while Ed Miliband called for criminal prosecutions. Barclays’ embattled CEO, Bob Diamond, has faced fresh calls for his resignation.
Today bought fresh news of Barclays’ malpractice, with the FSA instructing them and three other high street banks (Lloyds, RBS and HSBC) to pay redress to a large number of small business customers that were missold interest rate swaps.
Meanwhile, the latest voice to join the chorus of outrage over the banking sector’s behaviour is none other than that of Mervyn King, Governor of the Bank of England.
Earlier today, at a press conference to mark the launch of the Bank of England’s Financial Stability Report, King refused to endorse Diamond as a fit and proper person to run a bank. “There’s something very wrong with the UK banking industry“, he said, “and we need to put it right.”
“It is time to do something about the banking system…Many people in the banking industry are hard-working and feel badly let down by some of their colleagues and leaders. It goes to the culture and the structure of banks – the excessive compensation, the shoddy treatment of customers, the deceitful manipulation of a key interest rate, and today news of yet another mis-selling scandal.”
• Miliband: Time for prosecutions, proper regulation and an end to the “casino culture” 28 June 2012
• Osborne, Barclays, the Cayman Islands and tax avoidance 17 April 2012
• The warnings about Barclays’s tax-dodging greed were there in 2008 28 February 2012
• Transparency, accountability, responsibility: Miliband’s “one nation banking” principles 3 February 2012
• The government has the power to stop Hester’s bonus, they just don’t want to 27 January 2012
The logical conclusion to all of this is that we need a Leveson inquiry for the banking sector. Yet King denies that such a thing is necessary, as does David Cameron.
How many more revelations and scandals will it take for that position to become untenable?
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21 Responses to “After the Barclays Libor scandal, how long must we wait for a public inquiry?”
JC
Over the 2006 – 2009 period, a number of banks are reported to have done this. Are we to see each individual bank castigated here or just some of them? Wouldn’t it be better to give a more detailed explanation of what happened, how it happened, what the current government might do to limit the possibilities of this happening again and whether any criminal activities were uncovered?
Much as I don’t like Barclays, I see no point in solely bashing one bank when most of them were involved.
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Anonymous
Without a full enquiry, how are we to KNOW who did this?
JC
As you are aware, I was commenting on the article, not arguing that an enquiry was not necessary. Let’s have the investigation first to find out what happened, followed by the FSA hearings and (possible) fines. It may well be worth an enquiry then to understand why the system of regulation put in place allowed this to happen.
Anonymous
Sure. As long as it’s not conducted as political blame game when this was a subject where there was a (mistaken) consensus before the crisis.