Reaction in the UK To This Morning’s Bob Diamond Testimony
With Diamond’s testimony in the LIBOR scandal, it is always worth reading some of Jessie’s thoughts on the matter.
After the hearing, Conservative MP David Ruffley, a member of the Treasury Committee, said he was not satisfied with Mr Diamond’s evidence.
“Either he was complicit or, frankly, incompetent,” Mr Ruffley told the BBC.
He said he was astonished that Mr Diamond said he only became aware of the rate-rigging at Barclays last month.
“It was quite shocking testimony, in the sense that there was serious wrongdoing and he didn’t know about it,” the MP said. “Heaven knows what else was going on inside the bank.” BBC
“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”
John Dalberg Lord Acton
I found much of his testimony troubling when viewed withing the context of what had actually happened, which is a long term criminal conspiracy involving many of the major Banks to ‘fix’ one of the public financial system’s most important measures.
One example of his dissembling is the finger pointing at the Bank of England, at them encouraging Barclays to jigger rates during the 2008 liquidity crisis. There should be little doubt that governments intervene in markets during crises. But they also turn a blind eye to much criminal activity in ordinary times as well, as a professional courtesy it appears.
This deliberately misstates and misdirects the history of LIBOR fixing for some three years at least prior to the crisis with evidence dating from 2005. Felix Salmon of Reuters enlightens us on this little bit of prevarication. Defiant Barclays.
Is Mr. Diamond not only negligently incompetent but delusional as well, or merely a pathological liar?
The standard CEO defense is well known to the readers here, and to those who have closely followed the series of scandals from Enron to MF Global to JPM. The leaders of the companies are paid astronomical sums to run their firms and take credit for the results, but if anything should go wrong, they are never involved and know almost nothing, barely paying any attention at all to the business which they direct.
And they throw their employees, their shareholders, and the public under the bus.
There will be plenty of excuses made and defenses of a thoroughly rotten financial system offered. This is all a part of the credibility trap, and the corruptibility of even the best of us, and certainly of the worst.
Power not only corrupts, it attracts the weak ambivalent and the corruptible to its service.
“There is no error so monstrous that it fails to find defenders among the ablest men…The danger is not that a particular class is unfit to govern. Every class is unfit to govern…The strong man with the dagger is followed by the weak man with the sponge.”
John Dalberg Lord Acton