Cameron Announces Hearings into Financial Culture
Filed Under: Business, Politics | Posted: 07/02/2012 at 1:39PM
Comments | Region: United Kingdom (Great Britain)
Plus ça change…
London July 2, 2012. English Prime Minister David Cameron has announced an inquiry into the banking industry.
In a dramatic appearance before Parliament, Cameron announced that the inquiry would be empowered to examine witnesses under oath and has the stated aim of "gaining access to all relevant papers." The PM said the inquiry will report back by Christmas so that its proposals can form part of the financial services bill. "Transparency, conflicts of interest and the culture and professional standards of the financial services industry including the interaction with the criminal law" will all be under review.
The inquiry’s investigation will be complete by the end of the year so that its proposals can be included in the financial services bill, which will implement reforms recommended by the Vickers inquiry. The inquiry, chaired by Andrew Tyrie, head of the Commons Treasury select committee, will start work within days.
Ed Miliband, the head of the Labour party said, in so many words, that a parliamentary inquiry was insufficient. "We do not think the great and the good of Westminster should investigate the great and the good of the City of London."
The danger, as the English newspaper the Guardian observed, is that "a parliamentary inquiry, including even one with a large number of experienced peers is that it descends into party politics, rather than becoming a serious evidence-gathering process."
The Chairman of Barclay’s, Marcus Agius, has resigned, writing that he is "the ultimate guardian of the bank’s reputation" and "unacceptable standards of behaviour" have "dealt a devastating blow to Barclays’ reputation." Bob Diamond, the CEO implicated in the LIBOR interest rate scandal, remains in office and now must oversee reform efforts at the bank.
Here then is a blueprint for what French President François Hollande must do if he wants to punt the ball to someone else. Readers of my last column who made it all the way to the end may derive a wee bit of mirth from seeing my prediction of "Hollande ordering a study of the financial system" reflected not in Paris but in the English capital. I was only off by a few hundred kilometers. News travels.
To give a brief review, Barclays Bank, of which Bob Diamond is CEO, was caught red-handed in the attempt – who knows how successful – to jigger interest rates worldwide. Said Mr. Diamond remains in office and the Chairman walks the plank. Diamond will now of necessity be in charge of reform efforts at the bank, a notion that at least one financial writer has already called "laughable." The study and its reccommendations will be, you may be sure, of moderate import, a series of genteel reforms that will be quickly ignored.
But who exactly is laughing? The Prime Minister might well have ordered an investigation into the possibility of criminal charges against Diamond. Instead he skipped rather lightly past "the interaction with the criminal law" part and reserved his special glee for two Labour Party leaders, Ed Balls, a former economic secretary to the Treasury, and Ed Miliband, a former Treasury special adviser. "No one would like to see the shadow chancellor in the dock of a courtroom more than me," Cameron said.
Things must be very merry at Barclays’ headquarters in the City. Although it is still morning on Tuesday, they’ve already broken out the champagne and Bob Diamond is going up and down the corridors serenading the troops. He’s quite jovial and soon the drunkeness will reach all the way down to the soles of their feet, to steal a phrase from François Rabelais. And count on it, the next laddish adventure in peculation will be underway shortly.
And why not celebrate? Diamond got his Christmas present from Cameron in July.
Iddhis Bing reports from Paris.