You could not make it up

Mid 2012 brings us a further series of EU summits, held as part of increasingly desperate efforts to avoid serial sovereign default in Greece, Spain, Portugal, Italy.

Hinde Capital publish a report forecasting equal doom for the UK economy (Eyes Wide Shut). Admittedly they have investments in gold to sell, and hence an interest in scaring us all. But large sections of their report make perfectly plausible reading.

And now we learn more details of LIBOR manipulation by the banks, over a long period. The FSA formal note to Barclays states:

Barclays acted inappropriately and breached Principle 5 on numerous occasions between January 2005 and July 2008 by making US dollar LIBOR and EURIBOR submissions which took into account requests made by its interest rate derivatives traders (“Derivatives Traders”). At times these included requests made on behalf of derivatives traders at other banks. The Derivatives Traders were motivated by profit and sought to benefit Barclays’ trading positions.

The Treasury Select Committee want to hear from Bob Diamond. Ed Miliband calls for criminal investigation. Diamond announces that he and fellow senior managers at Barclays will forgo their bonus for this year.

Coming on top of revelations of widespread tax evasion by the wealthy, and at a moment when cuts in welfare benefits are starting having real effect, the incongruities are stark. Efforts by the Government to persuade its citizens that ‘ we are all in it together’ prompt increasing derision.

What we have yet to hear is any estimate of the impact of manipulation of LIBOR and EURIBOR. Whatever gains accrued to Barclays traders were losses for somebody down the line.

For how long can the Government continue to insist that banks such as RBS and LloydsTSB should be returned to the safe and trusted hands of the private sector, as soon as their share price allows? And when will the public have their chance to ask direct questions of banking bosses, in a forum such as proposed on this website?

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