July 4, 2012, 12:19am
Barclays is getting its comeuppance. Where people break the regulations of their industry or the law of the land then they should face the appropriate punishment. We don’t know how deep the rot is – the question is how to find out? Because while Barclays, and maybe others, did it, it was at best with politicians turning a blind eye, at worse creating a regime which in essence encouraged such cheating. And here we get to the heart of the problem. For three decades, financialised capital in the UK has become so powerful that it has pulled the strings of the politicians. So how can the puppets now investigate the puppet masters? Only an independent and public inquiry can get to the truth. If that happens, the City will never be the same again. That is why such an inquiry will be resisted.
Neal Lawson is chair of the pressure group Compass and author of the book All Consuming.
The focus on Barclays is because it was the first to settle, but it won’t be the only culprit and we will have to find out what happens next. Certainly, Barclays’ management and compliance team deserve the flak they are getting, but the regulators should be under fire too. The City press have expressed concerns about the Libor-setting process for years – all through the 2008 crisis they carried rumours of misleading rate reporting. In 2008, Sir Mervyn King was alarmed enough to press for changes, but gave up because the Bank of England did not have regulatory responsibility. How did the FSA miss all that and fail to investigate in a timely fashion? It seems a case of the same regulatory inattention and inactivity that allowed the 2008 crisis to develop. When you leave the keys in the front door, you cannot wholly blame the burglar.
Tim Ambler is a senior fellow of the Adam Smith Institute.