Those naughty bankers....

SimonAH

This libor scandal at Barclays has the potential to really screw things up no? I anticipate a massive slew of investigations and enquiries to make phone hacking seem like a trip to the headmaster's office by comparison.

rjsterry

SimonAH wrote:

This libor scandal at Barclays has the potential to really screw things up no? I anticipate a massive slew of investigations and enquiries to make phone hacking seem like a trip to the headmaster's office by comparison.

I did hear that there are some significant defections by customers already. I think I heard Coop Bank reported new current accounts up 50%, but I may have misheard.

asprilla

I envisage threats to relocate to Hong Kong, protection given by the UK government against US investigations, a few sacrificial lambs a slap on the wrist and the requirement to self police better.

EKE_38BPM

If you want to steal and get away with it, don't throw a brick through a shop window, use a computer and carry a briefcase.

There is talk that there isn't a crime for the fixing of LIBOR rates. I would have thought that fraud would cover it, but then, I have a normal person's sense of right and wrong, not the morality of a banker or lawyer.

Gizmo_

Anyone closing their Barclays current account and defecting to another high-street bank is the worst kind of idiot.

What they've done is clearly massively underhand - but it's not like it was sanctioned by the management, unlike some of the more spectacular wheezes performed by certain other IBs, Lehman and Goldman most amusingly. And it will surface at some point that essentially, they're all "at it"...

[PS: I don't work for any of the companies mentioned; at least, not directly.]

jejv

http://order-order.com/2012/07/01/fsa-r ... ibor-scam/

Ouch.

rjsterry

Gizmo_ wrote:

Anyone closing their Barclays current account and defecting to another high-street bank is the worst kind of idiot.

What they've done is clearly massively underhand - but it's not like it was sanctioned by the management, unlike some of the more spectacular wheezes performed by certain other IBs, Lehman and Goldman most amusingly. And it will surface at some point that essentially, they're all "at it"...

[PS: I don't work for any of the companies mentioned; at least, not directly.]

]

I think that is pretty well accepted by all, including HMRC. Barclays are just first up as they cooperated with the HMRC's investigation. As far as I know (which is about as far as the edge of my desk) Coop Bank aren't in that sector, but many other high street names are.

BillyMansell

New labour agreed to a 'light touch' banking regime and the then opposition Conservatives wanted an even lighter touch approach so Camoron is now stuck between a rock and a hard place. It doesn't seem so clever now that Camoron singled out Jimmy Carr for being morally wrong over his financial matters (whilst not leveling the same response to Gary Barlow, the well known Conservative donator) when they were encouraging even greater moral abhorrences in the financial sector.

And what about Mervyn King? A complete patsy who can only offer insipid responses. He needs a good slap and be told to grow a pair.

gtvlusso

Asprilla wrote:

I envisage threats to relocate to Hong Kong, protection given by the UK government against US investigations, a few sacrificial lambs a slap on the wrist and the requirement to self police better.

+1

The British Government will not risk losing the banks for several reasons; the first being employment and wealth creation, the second being that the banks *could* be more inflexible in their approach to British business requirements and their UK customers. If there is a full scale investigation with Police - they will threaten to relocate, make huge redundancies and possibly make banking difficult in the UK.

However, if a crime has been committed it should be investigated to the full extent of the law and people bought to account for their actions or receive custodial sentences for wrong doing.....Will this happen? No, the banks are too big to lose and to powerful to annoy.

Davey Camers is on a sticky wicket with this one, He will be a coward if nothing is done or if he throws a full investigation he risks losing effective control of the UK Economy.......I think he will do sweet FA, because I think that he is a coward and is very much in bed with the privileged and influential few - I am afraid that I do not hold much faith in politics after the hacking scandal......

Bikequin

But for the previous 20 years everyone was happy to live off cheap credit and high public spending that was essentially funded by the City of London. Things go wrong and suddenly anyone who works for a financial instituion is on a par with war criminals. Hmmm.

TheStone

I think the population are beginning to wake up to what's been going on. For me, the worst part has still been the government bailouts and the BoE addiction to printing money. They're monetising the government debt and giving the banks free profits at the same time. They're only getting away with it because all the politicians and journalists are part of the same ponzi scheme.

Next couple of years could be very interesting.

SteppenHerring

It would be interesting to see if people go to prison for fixing a cricket match but not for fixing an important interest rate.

But then I doubt that the Pakistan cricket team donate to UK political parties.

Paul E

Bikequin wrote:

But for the previous 20 years everyone was happy to live off cheap credit and high public spending that was essentially funded by the City of London. Things go wrong and suddenly anyone who works for a financial instituion is on a par with war criminals. Hmmm.

It's not suddenly, have people forgotten about the banking crisis that meant billions being paid into banks to save their arses and now after the banks have recovered (but not the rest of the country) the greed starts yet again and they have been caught fiddling to make themselves ever richer at the expense of the poorer people in this country, which to be frank at the moment is most other people.

Criminals yes, not war criminals though, just take a look in Blair's direction for that.

gtvlusso

Bikequin wrote:

But for the previous 20 years everyone was happy to live off cheap credit and high public spending that was essentially funded by the City of London. Things go wrong and suddenly anyone who works for a financial instituion is on a par with war criminals. Hmmm.

If bankers have committed criminal offenses, then they should be prosecuted. Bob Diamond is probably right, it is probably only a few traders who are simply greedy and may have broken the law - however, they and their management should be accountable for their actions. As stated previously, I don't think anything will happen as the government is simply not powerful enough to chance a full investigation.

I believe that a high degree of the public were and still are very unaware of the deals and activity that the banks have been allowed by successive governments - however, this does not make people ignorant, the assumption is that the FSA and the government are looking after those interests on our behalf....turns out that they were not.

Money is a touchy subject. When bankers are seen with bulging wallets, then we find out that rates that affect normal families (mortgage rates) have been manipulated for profit by these well paid individuals, I think they have the right to be annoyed.

Twostage

Bob Diamond's letter is worth reading. He says they thought the other banks were under-reporting the LIBOR so they decided they should as well plus he says he's happy to go before the select committee but might not answer their questions

http://group.barclays.com/news/news-art ... 0349038798

clarkey cat

I have a normal person's sense of right and wrong, not the morality of a .... lawyer.

hey, leave us out of this.

cyclingprop

Twostage wrote:

Bob Diamond's letter is worth reading. He says they thought the other banks were under-reporting the LIBOR so they decided they should as well plus he says he's happy to go before the select committee but might not answer their questions

http://group.barclays.com/news/news-art ... 0349038798

I'm sure he's not worried about being booted out at some point. Apparently its quite LIBOR rating.

daviesee

Ricks being surprisingly quiet on this one.

Working too hard to fill up the coming vacancies?

EKE_38BPM

Bob Diamond has resigned.

Jay dubbleU

EKE_38BPM wrote:

Bob Diamond has resigned.

Before he was pushed ?

TheStone

Leading right to previous government now (and probably the current one).

It amazes me this is such a big deal. A few banks understate their borrowing rates to make interest rates look lower than they are. The BoE has been printing billions to deliberately move the market much lower. The former is totally insignificant (apart from an indication of how messed up the whole banking system / government is)

EKE_38BPM

TheStone wrote:

Leading right to previous government now (and probably the current one).

It amazes me this is such a big deal. A few banks understate their borrowing rates to make interest rates look lower than they are. The BoE has been printing billions to deliberately move the market much lower. The former is totally insignificant (apart from an indication of how messed up the whole banking system / government is)

If you have any loans, mortgages or bank accounts it may have affected the interest rate that you receive or pay. In that respect, it is significant. This could have the knock-on effect of shops having to put prices up to cover their increased mortgage payments, so even If you don't have a mortgage etc, it still effects you and the rest of us.

TheStone

EKE_38BPM wrote:

If you have any loans, mortgages or bank accounts it may have affected the interest rate that you receive or pay. In that respect, it is significant. This could have the knock-on effect of shops having to put prices up to cover their increased mortgage payments, so even If you don't have a mortgage etc, it still effects you and the rest of us.

Sounds like they've been understating their interbank borrowing rate. LIBOR discards many submissions, taking only those in the middle. Will be interesting to see, but I'd be amazed if collectively they ever shifted LIBOR by anywhere near 0.05% (and that's down). The actions of the government and the central bank has shifted interest rates down by at least 3%. Possibly much, much more.

jds_1981

EKE_38BPM wrote:

If you have any loans, mortgages or bank accounts it may have affected the interest rate that you receive or pay. In that respect, it is significant. This could have the knock-on effect of shops having to put prices up to cover their increased mortgage payments, so even If you don't have a mortgage etc, it still effects you and the rest of us.

mortgage holders on Libor were getting a very good deal. New mortgage borrower presumably had to borrow at 'real' rates though.

The actions of the government and the central bank has shifted interest rates down by at least 3%. Possibly much, much more.

How tired Merkel looked coming out of meetings has probably changed libor by more.

Gizmo_

EKE_38BPM wrote:

TheStone wrote:

Leading right to previous government now (and probably the current one).

It amazes me this is such a big deal. A few banks understate their borrowing rates to make interest rates look lower than they are. The BoE has been printing billions to deliberately move the market much lower. The former is totally insignificant (apart from an indication of how messed up the whole banking system / government is)

If you have any loans, mortgages or bank accounts it may have affected the interest rate that you receive or pay. In that respect, it is significant. This could have the knock-on effect of shops having to put prices up to cover their increased mortgage payments, so even If you don't have a mortgage etc, it still effects you and the rest of us.

AIUI they were only adjusting the short-term contract LIBOR. Won't have affected anyone with a mortgage. Not that this makes it all right, of course.

Bob D's gone because he doesn't need this sh!t. He took a massive pay cut to become Barclays CEO compared to his previous job (head of Bar Cap), he doesn't need the money, why hang around and become a Fred Goodwinesque hate figure?

Twostage

cyclingprop wrote:

Twostage wrote:

Bob Diamond's letter is worth reading. He says they thought the other banks were under-reporting the LIBOR so they decided they should as well plus he says he's happy to go before the select committee but might not answer their questions

http://group.barclays.com/news/news-art ... 0349038798

I'm sure he's not worried about being booted out at some point. Apparently its quite LIBOR rating.

LIBORated already.

rjsterry

TheStone wrote:

EKE_38BPM wrote:

If you have any loans, mortgages or bank accounts it may have affected the interest rate that you receive or pay. In that respect, it is significant. This could have the knock-on effect of shops having to put prices up to cover their increased mortgage payments, so even If you don't have a mortgage etc, it still effects you and the rest of us.

Sounds like they've been understating their interbank borrowing rate. LIBOR discards many submissions, taking only those in the middle. Will be interesting to see, but I'd be amazed if collectively they ever shifted LIBOR by anywhere near 0.05% (and that's down). The actions of the government and the central bank has shifted interest rates down by at least 3%. Possibly much, much more.

This seemed relevant in light of your comments above.

http://www.guardian.co.uk/business/2012/jul/02/barclays-libor-scandal-change-banking-culture