Gavin Maclure's Musings

My take on politics locally, nationally and internationally

Parliamentary Inquiry into corruption at the banks won’t cut it

2 Comments

Ex-Barclays CEO Bob Diamond easily deals with MPs

Following the dismal performance of MPs in questioning city-slicker Bob Diamond, who ran rings around them, the Government has won a vote to keep the judge and QCs away from investigating the banking scandal and having been backed into a corner the Labour Party have succumbed and said they will now co-operate with the inquiry to be led by Conservative MP and Treasury Select Committee chairman Andrew Tyrie.

As Alan Johnson said on last night’s BBC Question Time, there is plenty more to come. Another 20 banks are being investigated by the UK’s Financial Services Authority (FSA) with many more than Barclays expected to be implicated in interest rate rigging to increase trader profits and fleece mortgage holders and small business owners on their loans. There will come a time when David Cameron will be forced to call for a judge.

The Labour Party shouldn’t be so smug though as eventually it will be uncovered they knew about the LIBOR fixing and probably encouraged it. If that was the case, they could be implicated in criminal behaviour which may still see bankers banged up.

But I also side with Labour on the need for a public inquiry – Leveson-style – because politicians of all political hue are in cahoots (no pun intended – keep up!) with their banker mates in The City. This didn’t take long to prove when Bob Diamond called Treasury Select Committee Conservative member Jesse Norman by his first name (as he did with all MPs on the panel) and whilst Mr Norman tried to spurt a question out, Mr Diamond was reminiscing about the old times when he and Jesse both worked for – you guessed it – Barclays Bank!

Both main parties are up to their necks in this banker corruption:
Labour desperately tried to make life easier and richer for bankers whilst they were in office, as they needed to correct their reputation for being enemies of financiers and also they needed the bank’s taxes to create their huge welfare client state. The Conservatives on the other hand ARE friends of the bankers and many are either former bankers or ARE still bankers such as Deputy Conservative Chairman Michael Fallon, who sits on the board of Tullett Prebon. Many MPs also relied heavily on their City friends to fund their General Election campaigns back in 2010.

The above patently explains why politicians should not be questioning and investigating bankers: it is in their interest to ensure the bodies remain hidden from the public. This will not do.

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Author: gavinmaclure

IT professional; political blogger, former Conservative councillor

2 thoughts on “Parliamentary Inquiry into corruption at the banks won’t cut it

  1. Very good points — this is a disgrace for Labour as much as it is a shame for the Conservatives. The public will not trust MPs to clean this particular stables. I suspect further revelations will force the Government to give way.Diamond really shot the bankers' cause in the foot with his arrogant performance, but the way that he thought he safely could perform like that says it all really.

  2. The Times said this: "The economy may be on the rocks but at least the inquiry business is booming. Ed Miliband clearly believes the Leveson Inquiry has been a great success for Labour so it is no surprise that he wants another one, into the banking industry."But the Government was right to oppose a lengthy, judge-led inquiry, which the Labour leader suggested would spend a year looking into the “culture and practices” of the City. The issue has already been the subject of several reviews, including the Independent Commission on Banking, which proposed a range of reforms that the Government is preparing to implement."There can be no arguement that there were problems with the culture and practices of the City in the run-up to the financial crisis. Even Bob Diamond agrees with that. But big changes have already been made and it is hard to see what concrete benefits would come from a further inquiry, other than to provide another forum in which the public can see industry leaders being held to account."This is not a trivial consideration. Rebuilding public trust in banking is vital for the country and there is a long way to go. The heavy lifting must be done by regulators and the courts. But if another inquiry helps, that may be reason enough to hold one. This argues for something short, sharp and focused. An inquiry into the issues surrounding the Libor manipulation scandal would have some merit, but may not shed a great deal of light, at least in the short term."It is pretty clear that at the height of the credit crisis it was not only Barclays that was lying about the rates at which it could borrow. Indeed, it is likely that Barclays was not the worst offender. Yet all the other big banks that are being investigated by regulators over the issue have yet to settle, so there would be a limit to how helpful they could be to an inquiry."If the main aim of the inquiry is to put bankers in the stocks then there is a strong case that it should be the parliamentary one that the Government has now chosen. Andrew Tyrie, the Tory chairman of the Commons Treasury Select Committee, was a good choice for chairman, a serious and independent-minded politician with a deep knowledge of the City, regulation and Whitehall. But Labour fears a parliamentary inquiry will turn into an attack on the previous Government’s record on City regulation."Members of the Treasury committee have argued that they should carry out the inquiry. The committee hardly covered itself in glory when it took evidence from Mr Diamond this week. With a few exceptions, the questioning was poorly planned and hopelessly executed. Several members seemed unaware of Mr Diamond’s previous answers, possibly because they had been tweeting or reading e-mails. The committee has produced some good reports in the past, not least into the collapse of Northern Rock, and has several members with expert banking knowledge. But the Government understandably wants something a bit different and has asked Mr Tyrie to chair a special cross-party panel includings MPs and peers. Labour will to continue to push for a full public inquiry but has grudgingly agreed to take part in the panel, which will focus on narrow, Libor-related issues."This may not prove much more illuminating than Mr Diamond’s appearance but could still be another small step towards rebuilding confidence in the City."I happen to think they're absolutely right. A Parliamentary Inquiry, that can get underway right away, led by Andrew Tyrie, with evidence under oath and a QC to question, absolutely will do more than another judge-led inquiry.Most important was the little noticed intervention by the Serious Fraud Office – who will be making arrests and leading prosecutions. This is criminal behaviour of a minority of bankers. A knee jerk reaction now is unnecessary, these people will be prosecuted and convicted, and hopefully a decent prison sentence will deter people from doing it again.

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