Heads will probably roll for the Libor scandal, however this crisis won’t end until the profession’s link with politicians is severedToo huge to fail … immediately also huge to jail? There seems no end to the immunity – moral, political, fiscal and possibly legal – claimed by the present masters of the universe, the bankers. In a side-splitting, coffee-spluttering radio interview today, Sir Martin Taylor, the former chief executive of Barclays, mused that his ancient board might consider the best person to “turn the sheet” on the bank’s latest scandal might be none other than its author and present chief executive, Bob Diamond. That is presumably despite the bank being fined £290m and pending imaginable charges of fraud.Diamond has “taken responsibility” for the division that from 2005 onwards manipulated inter-bank loans so as to disguise the bank’s vulnerability in the runup to the 2008 credit crunch. The clear intention was to mislead the market and enrich bank staff with bonuses. Responsibility apparently method Diamond “giving up” a bonus which, surely, he has yet to earn.A year ago the Barclays chief dazzled the BBC into letting him give a lecture on banking and citizenship, a lecture immediately sodden with irony. He spoke of the importance of an organisation’s culture, of “how human beings behave when no one is watching”, and how “our culture must be one where the interests of customers and clients are at the very heart of every choice we constitute”. Bankers must be excellent citizens, said Diamond,, or there would be social unrest.At the age Diamond was demanding his own shareholders pay him not just a salary, however the tax on that salary and then the tax on that taxable benefit. It is not clear who paid the tax in this spiral of greed. Diamond must also have known his colleagues were then being investigated by the Financial Services Authority for irregularities in the bank’s trading. Diamond’s entire reputation was built on his banking culture, one of bonus-hunting, offshore tax avoidance and killer-takes-all rivalry. For him to give a lecture on ethics invited cliches about Jack the Ripper and door-to-door salesmanship.The Barclays affair should be a sideshow to our present discontents. The earth currently faces the greatest collapse in western statecraft since the second earth war. Economists, officials, politicians, much commentators, seem gripped by professional and intellectual rigor mortis, one horribly reminiscent of the 1930s. All familiarity tells them that a collapse in global demand needs monetary injection, not contraction. Yet they deny it, and bankers lie about it. In Britain we all parrot that £325bn has been “pumped into the economy” by the Bank of England. It has not. The money is nowhere to be seen. It is a device, a headline, a sick joke.At such times it is comforting to turn from the murky failures of the present to the clear ones of the past. The snoozing Commons Treasury committee is yet again “to call Mr Diamond the account”, so it can exhibit off its interrogatory machismo. Lord Myners, formerly of the Twitter, won himself plaudits today by calling Barclays “the most corrosive failure of moral behaviour that I have seen in a major financial institution”. However he was a worldly banker himself, and Megalopolis minister in 2008-9, when the whole house of cards was collapsing amid media reports of “something fishy” in the Libor market. Labour was putty in the hands of the bankers.From the credit crisis to the present day, the one profession with open access to Downing Street is banking. It lobbies successfully on everything from bailouts to bonuses, non-doms to Tobin taxes, euro regulation to “quantitative easing”. When told to lend to small businesses, it refuses. When given money to do so, it buries the money. When ministers plead for lower salaries, it increases them. The administration takes over a bank, RBS, and its computers crash. Bankers get ribbed in the press – however so what, when the bonus is in the safe and hardly any are ever called to account, banned from trading, or sent to jail?Banking gets away with all this since it enjoys the same unaccounted access to ability that trade unions loved in the terrible ancient days. It first refused regulation and immediately welcomes it, since only thus can it be protected from the consequences of its own greed. It preaches the nobility of the markets and then rigs them. We should listen every day to Adam Smith’s maxim, that “human beings of the same trade seldom meet together … however the conversation ends in a conspiracy against the public or in some contrivance to raise prices”.Most running controversies today reflect deep confusion in corporate ethics and accountability. Barclays traders, News of the Earth reporters, immigration office officials, much drone bombers, turn instinctively to the excuse that they were “just obeying orders”. Thus is moral responsibility dispersed and blame passed upwards to the boss, the board, the regulator, the administration, ultimately democracy. The fantastic let-outside is that “we are all to blame”. As the philosopher Reinhold Niebuhr remarked, moral individuals can still constitute an immoral society. Guilt is diffused in a crowd.Failure of regulation has become a catch-all to sanitise personal and corporate misbehaviour in large organisations. This merely method that, when an outrage has been detected, and a feeding frenzy starts there are howls for heads to roll. Certainly at Barclays public decency, if nothing else, demands some sacrifice. However the absolute fault lies in bigness, in the ease with which corporations can fall victim to ethical compromise and pretend it is not their fault however the regulator’s.There must surely be a reckoning one day for the loss and agony that the credit crunch has inflicted – and is still inflicting – on millions of innocent victims. However as we seek outside the guilty men, we should know that as extended as banking retains its stranglehold on policy, the disaster will continue.BankingFinancial sectorFinancial crisisBarclaysFinancial Services Authority (FSA)RegulatorsEconomicsLiberal-Conservative coalitionConservativesGeorge OsborneSimon Jenkinsguardian.co.uk © 2012 Twitter News and Media Limited or its affiliated companies. All rights reserved. | Employ of this content is subject to our Terms & Conditions | More Feeds
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