Socialist Worker

Rigging wasn't down to a few individuals: it went to the top

by Tom Walker
Issue No. 2311

The Barclays rate-rigging scandal is much bigger than just one bank. In fact, they’re all in it together.

London-based banks face a flurry of international probes over fixing the Libor rate. In Canada, the regulator’s fingers are pointing at RBS, HSBC, Citigroup, Deutsche Bank, JP Morgan and UBS.

At Barclays, the revelations forced out boss Bob Diamond and two more top executives. But many more bankers could yet fall.

RBS is fighting a court order which would force it to hand over internal documents to the Canadian regulators. It is thought these documents could prove it was also implicated in the rate-rigging scandal.

A witness statement even names two senior London RBS traders, Brent Davies and Will Hall, as allegedly being involved.

And the court papers go on to name a circle of bankers at HSBC, JP Morgan and Deutsche Bank who they say exchanged emails and instant messages to fix the rate.

The British government has owned 83 percent of RBS since the bank bailouts—but has refused to make it cooperate with the investigation. Meanwhile, in Germany, regulators have launched a probe into Deutsche Bank. It has already suspended two traders.

Knowledge

But the rigging wasn’t down to a few individuals. The more that comes out, the clearer it is that knowledge of what was going on went right to the top.

Paul Tucker, deputy governor of the Bank of England, is the one who allegedly gave a “nod and a wink” to Bob Diamond over the rates. He acted like a “spymaster”, according to one senior Bank employee.

The employee added that Tucker and Barclays boss Bob Diamond have been pals for “over 10 years”. The tone of the emails between them revealed this week shows as much.

So Diamond asks Tucker, “You around for a chat today or in the morning?” And Tucker asks Diamond if they can talk, but not by email, because “it’s a slightly sensitive point”.

As always, the powerful make their nods and winks hard to prove. That’s what makes the row between Labour’s Ed Balls and Tory George Osborne so pointless.

Osborne claims Balls, then a minister, was involved in the scandal. Balls certainly encouraged the bankers to do what they wanted. But Osborne’s only criticism of Labour back then was that they didn’t go far enough for the banks.

Now Labour wants bad bankers to be “struck off” and to encourage more “competition” in banking. But this isn’t about a few dodgy bankers or even a few dodgy banks. They’re all rotten.


What a bunch of bankers

So who’s asking the questions at the MPs’ Treasury Select Committee and why? Out of the six Tory MPs on the committee, four have had jobs in banking and finance—two of them at Barclays itself.

  • Jesse Norman was a director of Barclays’ investment banking division

  • Andrea Leadsom worked for Barclays for ten years, going from the trading floor to a director

  • Mark Garnier has described his past jobs as being “a hedge fund manager and investment banker”.

  • Michael Fallon is a director at City money broker Tullet Prebon, which is being looked at as part of the rate-rigging investigation.


What else do bankers run?

Barclays vice chairman Naguib Kheraj is hotly tipped to replace departed boss Bob Diamond.

Since the start of this month Kheraj has had another job too—sitting on the new NHS Commissioning Board. The banker is one of the “experts” the government has appointed to run the health service.

It’s not just him, though. Marcus Agius, the Barclays chair who resigned and then came back, is on the BBC Trust. And Sir Andrew Likierman, a director at Barclays, is chair of the National Audit Office.

So that government cash is in safe hands.


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