Barclays libor scandal: lock ’em up – it’s the only way of dealing with abuse like this
Virtually all financial scandals follow the same pattern. First there is the initial exposure of wrong doing, then comes the mitigating claim that it was common practice and everyone was up to it, and finally it emerges that the regulators knew all along but failed to act.
By Jeremy Warner
02 Jul 2012
The only bit of the generally repeated sequence of events missing in the Barclays case is the one I haven’t mentioned – the cover-up. As the crisis develops, someone, often the chief executive, is nearly always caught attempting to destroy the evidence.
Barclays did at least manage to avoid that one; emails are not so easily shredded as the paper work of old. But the other two elements are now fast snowballing; as is now apparent, manipulation of interbank interest rates appears to have been endemic at a number of banks and what’s more, regulators repeatedly ignored warnings of it.
Regulatory failure is as much a part of this story as the mischief itself. To state this reality is not to absolve Barclays or anyone else from blame, but merely to point out that such scandals tend invariably to occur against a backdrop of poor standards, lack of vigilance and a general climate of regulatory tolerance.
Much as David Cameron and his Chancellor, George Osborne, would like to load responsibility for this culture of light touch regulation on to their predecessors, many in their own Government are as guilty as Labour in this regard. At the time all this nonsense was building up, they were cheering on from the sidelines. Light touch was widely applauded as part of London’s competitive advantage.
Repeated attempts on both sides of the House to score party political points out of the Barclays scandal are frankly pitiful. All are culpable in this failure.