Two other pieces on banking are worth reading today. Firstly Aditya Chakrabortty on the Barclays Libor scandal:
Shot through these iniquities is a high-handed sense of being above the law. It’s obvious in the blatancy with which Barclays went about rigging interest rates even at the height of the crisis while taxpayers were bailing it out with subsidies and guarantees.
And it’s here that Miliband’s explanation runs out of road, too. Because this isn’t just an everyday story of ordinary banking folk constantly hatching schemes to pervert markets, morality and the course of justice. In his call for a public inquiry, the Labour leader is desperate to restrict the role of politicians in the financial boom and bust to a mere walk-on part. But in the Libor scandal and elsewhere, the real picture is of an industry allowed to run riot by their regulators and governments.
Listening to the Commons exchanges yesterday on the Chancellor’s proposal for a Parliamentary Committee of Inquiry into the LIBOR scandal was depressing. It was the Commons at its worst: blame shifting; moralising; and, above all, opportunistic point scoring across the floor. It’s not just the bankers who don’t get it; lots of MPs also do not realise the scale of the disaster that is the UK financial system.
the City is a web of markets proliferating increasingly complex and risky financial instruments that do little or nothing to promote welfare or efficiency in the wider economy. The “other” scandal last week – the outrageous rip off at the expense of small business – is no single accident; it reflects the fact that finance is now in the business of creating and selling financial instruments regardless of the social harm they create. Adair Turner’s condemnation of “useless” financial innovations is an understatement; the City has moved beyond the creation of the useless to the manufacture of the positively malign.
We need a full Leveson-style inquiry to examine how the casino is working, and to examine the web of patronage and lobbying that has allowed the City casino to trade with impunity.
Listening to Radio 4 now, the scandal narrative is firmly in place.