RUTH SUNDERLAND: City of London's reputation harmed by Lie-bor

By RUTH SUNDERLAND FOR THE DAILY MAIL

Updated: 22:27 GMT, 28 June 2012

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Give a man a gun and he can rob a bank; give a man a bank and he can rob everyone, so the saying goes.

Barclays and its fellow banks have become accustomed to scandals, from mis-sold PPI loan insurance and savings bonds for  pensioners to aggressive tax avoidance schemes depriving the public purse of  hundreds of millions of much-needed pounds.

If you treasured this article and also you would like to receive more info with regards to sumur bor depok kindly visit the webpage. They are also all too familiar with the phenomenon of the rogue trader, such as the London Whale at JP Morgan who landed the Wall Street bank with around $5billion of losses.

Barclays: Accustomed to scandals

But with the LIBOR rate-rigging scandal, the banks have surpassed themselves.

It is in an entirely different league, involving hundreds of traders from some of the largest institutions across three continents.

LIBOR is used as a benchmark for trillions of pounds of loans and financial products around the world, so scheming to manipulate it amounts to planting the virus of corruption throughout the entire global system.

The fiddling of LIBOR was also a grave breach of trust between  Barclays and the UK taxpayer, represented by the Treasury.

At the height of the credit crunch, Barclays was hugely resistant to receiving any sort of UK government support, which would have required it to submit to controls on bonus payments to Bob Diamond and his cohorts.

Its position vis a vis state aid was based on its supposed financial strength, which as we now know was at least partly illusory.

That is a very serious betrayal of good faith indeed.

Bob Diamond's offer to sacrifice his bonus is not remotely sufficient amends. For last year, his bonus of £2.7million was only one component of a package worth almost £18million once the payouts from long-term incentives and his £5.75million tax equalisation payment is taken into account.

Diamond could cover the entire UK fine of £59million from his past few years' earnings. 

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It is worth recalling, too, that the supposed superior strength of Barclays and its allegedly adept handling of the crisis were frequently trotted out by its spin doctors as justifications for continuing outsize pay packets.

As the National Association of Pension Funds has demanded, there should be extensive bonus clawbacks.

Given the emphasis he has placed on good ‘citizenship', Diamond should also consider whether he can remain in his position.

Barclays of course is not alone in its wrong-doing over LIBOR and the penalties it has suffered have been mitigated by the fact that it co-operated with the authorities. Large US and European banks, including JP Morgan, Citigroup and Deutsche are also in the frame along with other British institutions HSBC, Lloyds and, inevitably, RBS.

There are no doubt numerous  lessons that will emerge from this affair over the coming weeks, but a few observations leap to mind.

First, the LIBOR (surely it must now be re-named Lie-bor) rate-setting system is amateurish, all-too-easy to finesse, and ineffectually supervised by industry body the British Bankers' Association, sumur bor jakarta a cheerleader whose trademark speciality is defending the indefensible.

In the thick of the crisis, it was an open secret that LIBOR rates had lost touch with reality - or at least it was to everyone except the BBA and the regulators.

LIBOR needs an urgent overhaul if it is to continue as an international benchmark.

Second, the folly of putting investment bankers in charge of our High Street giants is now abundantly plain. They have imported the amoral culture of the casino. Third, the damage that has been wreaked on the reputation of the City of London is incalculable.

One US senator last week noted in a hearing into the JP Morgan rogue trading affair how many scandals happened in London, which under a besotted New Labour government basked in so-called light-touch regulation.

He was right.

Finally, sumur bor depok it should - but probably won't - give pause for thought to the apologists for the banking sector.

Their complaints about ‘banker bashing' - a phrase that suggests the bankers are innocent victims and their critics are the thuggish culprits - have been exposed in all their hollowness.

This has been one of the worst weeks in the history of banking.

First the IT fiasco at Royal Bank of Scotland, now dwarfed by the scandal at Barclays that will no doubt engulf the rest of the sector.

At a time when we desperately need a functioning financial system to help revive our stalling economy, we are confronted instead with incompetence and corruption.