Miliband calls for an inquiry (interesting how the BBC changed their headline to big-up Ed, not for the first time...since changed again); Brown was at the heart of the design for what failed miserably; Balls and Miliband were his lieutenants: "no return to boom and bust". We know it was 'self delusion masking rank greed'...no risk. Britain having in place 'the most up-to-date early warning and response system' boasted Brown; it was worth nothing 'if you don't understand the system and its risks', watching Dispatches again is a good reminder. Politicians and bankers were and are living in a fools paradise...and "Right now, we’re seeing the party organizers blaming the bartenders";
But when Ed Balls adds his voice to calls for a Leveson-style inquiry for the banks, we ought to remember how many people have a vested interest in framing the banks for the crash. And is rigging interest rates for personal gain so much worse than rigging them for political gain by pumping cheap debt to the masses and dressing the result up as prosperity or recovery? [Link] (Fraser Nelson at The Spectator).
6 comments:
I don't think anybody is actually trying to make a link between LIBOR fixing and the banking crash. However what I do find quite insulting is the idea that politicians of any colour should be blamed for what actually was price fixing and in any other industry would fall foul of regulators. That said it's easy to blame lax regulations but a 0.0001% swing in the Libor rate was equivalent to a £50 bn movement on a bank's Balance Sheet - that's not down to any political incompetence that's down to greed and a lack of respect.
I actually think that the longer George Osborne is in the office the more incompetent he is looking and seems genuinely reluctant to do anything about anything.
I agree with the last sentence but am not sure what has got into George...it's almost as if they are trying to do everything about face.
I think there is a link: the Libor thing is a symptom of deeper malaise, guys completely arrogant and out of control as per the post yesterday: "The wrongdoings were overwhelmingly the product, not the cause, of the bubble" and the politicians have allowed it. This problem didn't just spring up now but sprang up due to poor regulation and many in the industry knew it and saw it and probably wondered why the politicians turned a blind eye.
I think this issue coming to light is confusing all sides of the political debate - it was quite amusing reading Guido's blog comments on Thursday, all those previously in favour of a light touch (which let's not forget was the Conservative approach whilst in opposition) are now advocating heavier legislation and criminal penalties.
Incidentally a good example of how things don't change: client of ours contacted us on Thursday via e-mail and it didn't make much sense. Two of us pondered this e-mail for a good while before giving in and calling the client. Anyway the short of it is that the finance company she wants to borrow money from wants to disregard one of her current loans so that the available headroom increases and they can lend her......big, drum roll, TEN TIMES HER INCOME.
Hi Paul, thanks...still reeling from the last paragraph...what is it with these people? Are they so obtuse or is the client onto such an obvious winner they want in, come what may!..."disregard one of her current loans", I know you're 'in the money business' to a certain extent (I know, I know!) so may have previous experience but I certainly have never heard of such a thing!
Anyway, by coincidence I posted at Guido's on Friday (and caused an interesting few comments on the Bob Diamond letter post, one of the things mentioned - and I know the blame game irritates you when it is so murky and all sides involved - but a couple of commentators mentioned the point about politicians being tied in too, that (not exact quotes)
...as soon as the LIBOR thing came to light publicly on Cameron's watch, he condemned it, but it was all happening under New Labour's nose on their watch with the most obsessive master of tiny details Gordon Brown in charge. Labour did NOTHING to stop this before it happened, and NOTHING after it happened and it was Gordon Brown's removal of banking oversight from the Bank of England to give much weaker and inappropriate oversight to the FSA which allowed this to happen.
It is laughable for Miliband to try to act annoyed and demand criminal prosecutions when it was HIS government which was in charge when it was all going on!!!
Yet again, just like with the media phone hacking scandal, it is a scandal which actually happened under Labour's noses and they did NOTHING, now that it has become public, labour are screaming for Tory blood.
The thing about Labour is that it wasn't just the banks that were allowed free rein while they were in power for 13 years. The same was the case for newspapers like NI. And the same was the case for MPs (of all parties) who fiddled their expenses.
And the same was the case for private companies who ran rings round the government procurement department regarding things like PFI and government IT projects...etc.
Therein lies the answer to your first comment re connecting this to politicians.
OK, it is impossible to know if/what Conservatives would have done and the calls you mention for heavier regulation are wrong, it is just effective legislation of the RIGHT BITS that needs sorting.
I agree with the last paragraph and also agree with the bits about things happening whilst Labour were in power but I hope that this doesn't become such a political bun fight that we forget who is responsible for the actual fixing of the rates here.
Most people don't need policing in their daily lives to know when something is wrong, they have a moral compass, the people responsible for this - like other frauds were happy to do what they liked believing it was right until they got caught.
Agree entirely.
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