The petty cash

So how about those funny people at Barclays, huh?

Lord Turner, the chairman of the Financial Services Authority, described the outrage that has built up over the bank’s actions.

“The cynical greed of traders asking their colleagues to falsify their Libor submissions so that they could make bigger profits – has justifiably shocked and angered people, in particular when we are facing hard economic times provoked by the financial crisis,” he told the Financial Services Authority’s annual meeting.

Oh well, so they moved a decimal point now and then. Bankers will be bankers.

Last week, regulators in the US and UK fined Barclays £290m ($450m) for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions.

Staff did this over a number of years, trying to raise them for profit and then, during the financial crisis, lowering them to hide the level to which Barclays was under financial stress.



  1. 'Tis Himself says

    This scandal is murkier than the linked BBC article suggests.

    Barclays suggested that in 2008 a Bank of England official, under pressure from the British government, may have encouraged the bank to lower its interest rates, which are used to help calculate the London interbank offered rate (Libor).

    Bob Diamond, the recently resigned CEO of Barclays, claims that he had a discussion with Paul Tucker, the Bank of England’s market director, about Barclays’s relatively high bids of the bank’s borrowing rate, one figure used to calculate Libor. At the height of the financial crisis, Libor was closely watched as a barometer of British banks health. It is calculated by an average of banks’ borrowing rates. The higher a bank’s rate, the riskier it is considered to be, so an overall high Libor would have suggested the sector was having trouble accessing cash.

    By Diamond’s account, Tucker told him that he had “received calls from a number of senior figures within Whitehall to question why Barclays was always toward the top end of the Libor pricing.” Diamond and his subordinates read this as a request (or order, depending on who’s talking) from the Bank of England to lower their interbank interest rates.

    This could get sticky for a lot of people very quickly.

  2. says

    It’s not for nothing that “bankers” has a capital “W”.

    Replace the “b” with “bfh” and, by the rules of Irish grammar, you get the same effect.

  3. SAWells says

    @1: even if lots of people wanted lower Libor rates- and people did, and there were good reasons for wanting that- the problem is not that “Barclays lowered its Libor rate”. The problem is that, instead of _really_ lowering their rate for inter-bank lending, they falsely submitted a low rate as a quote for Libor, while in reality demanding a higher rate for real inter-bank lending.

    Libor is _not_ “calculated by an average of banks’ borrowing rates”, though it should be; it’s calculated be an average of what banks _claim their rates are when they’re asked for a Libor quote_. Hence the scope for lies.

    So effectively Barclays are saying that they responded to a call for lower rates by lying about their rates. Yes, well. Erm. May you be afflicted by the plague of a thousand weasels, you bastards.

    The news yesterday sounded like Act V of Julius Caesar. Only Robert Peston can save us now. Bring popcorn.

  4. Jessie says

    Is anyone watching Bob Diamond being grilled by MPs at the moment? It’s being shown live via BBC’s website.

  5. Jessie says

    I say ‘grilled’ but what I’ve seen actually looks far too cosy and friendly. We need a proper judicial inquiry.

  6. maureen.brian says

    I’m watching it. Agree we need a judicial inquiry but right now committee is quietly filleting Diamond – showing him up as a bully, an unclear thinker and someone who will do anything rather than take any blame or answer a straight question.

    And now I have to go off to the doc.

  7. maureen.brian says

    You can tell why he’s a mate of Mitt Romney!

    He has been pressed on this repeatedly but he cannot see that there is anything wrong with the culture of an organisation where many knew of criminal behaviour but no-one thought to report it to him or the board. In fact, he seems to want praise for how heroically Barclays handled it all. Now resorting to emotional language to avoid thought – if you’re getting paid that much we don’t care whether you luuurve the bank or not. We expect you to manage the damn thing!

  8. says

    I’d watch but the BBC livestream isn’t available outside the UK and Sky News is doing general news at the moment. I’ll have to watch highlights later.

  9. Jessie says

    He’s referring to questioners by first name, making references to discussions they have had before and to people both he and the questioners know. Any investigation needs not only to be independent but also SEEN to be independent.

    Cameron is a fool if he thinks this can be dealt with in a quiet manner. Too many people are disgusted at the culture of greed and want answers.

  10. Matt Penfold says

    One of the problems Diamond has is that he is trying to say that the Government, via the Bank of England, wanted him to fix the rates and that he knew nothing about the rate fixing.

    Well Bob, which is it ? You cannot argue you were doing what the Bank of England asked you to do and you had no idea you were doing it.

  11. says

    Investment banks idolize their successful traders and salesmen.

    They can do no wrong and are allowed to behave appallingly. No rules are allowed to get in their way. More recently, UK governments have adopted the same open admiration. (Yes, Gordon, you know who I’m talking about).

    Bob Diamond and Fred Goodwin were both the products of this indulgent culture. So was Nick Leeson and most of the rogue traders after him.

    The UK doesn’t need an enquiry. It needs real prosecutors like the SEC. Someone who wants to put these people in jail.

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