According to the Independent today, the Serious Fraud Office considered launching a criminal investigation last summer into the attempted rigging of the Libor interest rate but decided against it because it would be a drag on resources. So why has it taken until now for this to become public knowledge and the banks have been able to continue their seedy dealings. I may be cynical but I also find it strange that this news breaks at the same time the latest UK GDP figures are released showing output dropped by 0.3%, this seems to have slipped under the radar.

FFS a guy got six months in jail during the riots for stealing a bottle of water yet these banksters can conspire to fraudulently rig LIBOR interest rates thus saving themselves BILLIONS and they are trying to tell us no laws were broken?!

It's plain to see that the whole global financial system is riddled with corruption and London is the epicentre of this financial crimewave yet the police and politicians do sod all about it. If nobody goes to jail in connection with these recent allegations it really is time to get the pitchforks out!

In case you missed it this all came out as a result of investigation into the rigging of the rate [useveral years ago[/u. When this was found to have occurred it should, IMO, have been dealt with as fraud and so by now instead of us seeing the FSA fining the bank £300m we should also already have seen individuals held accountable for their actions.

[url=http://www.bbc.co.uk/news/business-18685040Diamonds Aren't Forever[/url

Actually I did miss that. I was under the impression this all came out as a result of Barclays coming clean to the FSA about it (presumably in the hope of getting a lesser fine than those who didn't own up).

If this is the result of an investigation [iseveral years ago[/i why weren't they fined [iseveral years ago[/i?

If the US authorities hadn't become involved, I seriously doubt that we'd have heard anything about this at all.

Diamond's appearance before the Finance Committee tomorrow should make good television, he's got absolutely nothing to fear now and I reckon there'll be more than a few people at the Bank of England and parliament whose bums are squeaking pretty loudly.

The FSA only levied a <£60m fine mate, £230m penalty came from the US authorities

This is the interesting bit from the BBC article.

"It emerged over the weekend that Mr Diamond spoke to the deputy governor of the Bank of England Andrew Tucker about Barclays' Libor submissions at the height of the credit crunch in 2008.

The details of that telephone conversation will be an important area of questioning at this week's hearing of the Treasury Committee.

Barclays' managers came to believe, after the conversation between Mr Diamond and Mr Tucker, that the Bank of England had sanctioned them to lie about what they were paying to borrow when providing data to the committees that set the Libor rate."

Wasn't the alleged rigging going on for several years before that though?

At the height of the crunch anything is possible. If you recall the South American debt crisis governments told banks and auditors not to write down bad loans but to reschedule them. That's because all the world's big banks couldn't have taken the losses as they were so big.

Well, on the Beeb I just read this re Crazy Diamond's forthcoming Treasury Committee gig:



Barclays managers did not "allegedly" come to believe, they bluntly "came to believe". That the Bank of England had sanctioned them to lie

Who knew about this conversation? (Not an "alleged" conversation"icon_wink.gif.

Who knew that he is going to be questioned about it?

Who knew what Barclays managers had been led to believe and how else could they have come to believe it, if not via the only link between them and Tucker, viz Mr. Diamond?

Gets better by the day.

Seems like Bob may think there is evidence / suspicion he is personally implicated and this is his "defence"? Otherwise, why imply he thought it was all OK?

Barclays also appear to be suggesting that Tucker got the nod from Ed Balls.

Although quite what influence the Children's Minister, in the midst of the Baby P scandal, could exert is baffling

Looking at the report on Barclays it seems it referred to rate rigging between January 2005 and July 2008. So, before the alleged conversation. So, no defence on that score. So, one wonders whether the report itself was rigged to avoid implicating politicians / senior civil servants? Let's hope the truth outs and all implicated bankers face the full force of the law, repay all previous earnings and maybe get extradited to the USA. Let's hope that if any politicians colluded or influenced the alleged rigging they too get extradited.

I just hope tomorrow is explosive (metaphorically).

4th of July, bound to be fireworks

This gent sums up things well, in my opinion: www.standard.co.uk/business/mark ... rnalSearch

This gent sums up things well, in my opinion: www.standard.co.uk/business/mark ... rnalSearch

Thnking about the LIBOR enquiry again, who better to enquire into the dodgy dealings than those past-masters on lying, cheating and fiddling - our MPs?

It's a desperate defence, he's trying to implicate politicians and hope that they'll back off.
Despite the hysterical and typically biased article in The Sun (the one posted in the NHS thread) and others, all that I can see is that someone from the BoE (which is independent) and someone from Whitehall asked Barclay's why they were at the top end of the LIBOR rates.
How there is a leap from that to telling or sanctioning Barclays to artificially fix the rate is beyond me.

The way LIBOR is set is also interesting.

16 banks are consulted and the top and bottom four are discounted before the middle eight are consolidated. To have any real effect, there would need to be collusion on a grand scale.

Yes, but not as far as why they would actually [ido[/i the fraud, even if they believed the BoE had [isanctioned [/ithe fraud, is beyond me.

For me, this calls into question the myth of the omnipotent CEO: the 'top talent' who therefore command the top salaries. Bob Diamond has just said he knew nothing of the LIBOR fiddle. Let's suppose that's true. If Barclays made huge profits because of this fiddle, [ihe[/i would reap the rewards in terms of salary and bonus. But he knew nothing about it. It was nothing to do with him. This accords with my own experience from the days when I was a wage slave: many of the things which led to reduced costs/increased income were due to the efforts of people throughout the company, not just the CEO. And yet it's the CEO who gets the big pay. Time for limits on executive pay, methinks.

Someone's been busy making some stickers for Boris's Bikes:

I've long maintained the same - 100 x the lowest paid seems about fair.

The when it comes to executive bonuses, that should apply across the board too. So if the CEO is paid £1m and receives a bonus of £5m then everyone in the company should receive a bonus of 5 x their annual salary.

When you add to this the shambles at Nat West last few weeks the CEO's seem to have very little control over the actual [irunning[/i of the bank. They seem powerless and in effect have delegated the running of the bank to lower down managers as they claim to be in the dark over most things. If that is so then I don't see how they deserve the vast salaries anyway. In Diamond's case he couldn't even engender a suitable culture at the bank that would have stopped his employees from even thinking about rigging the rate. That is definitely CEO territory.

I think you are spot on about the money earned by the bank being down to its employees rather than the CEO. The trouble is the bonus culture spreads a long way down with even ordinary employees having some element of their wages made up from bonuses. This is a very American way of doing it. If the employee doesn't meet targets the wage bill is less and if they do, then the bank makes more money. This ignores the old fashioned way of doing business where people didn't cut corners to make a bonus and some staff in the regulatory areas of the bank would have seen it as their duty to put the brakes on sharp practice even if that did mean less profit for the bank. You worked hard for your salary but you did the job right.

I also found it really interesting that the rate rigging was done via email exchanges. I am sure in the past before IT systems allowed this easy communication the paths of the people setting the Libor rate and the traders never crossed. A Chinese Wall would have existed between these two sets of people as they just never met. It seems to me no one thought that it might not be a good idea for these two groups to be in such easy communication and preventing that sort of thing should have been put in place by Diamond.

I have worked in banks as a software supplier for years and they were always extremely keen on a proper division of labour in that those involved in IT security and the like were distinctly different groups and staff were often swapped in and out regularly so as not to become too familiar with the systems to prevent any abuse. It seems that sort of culture has gone.