If you were a trader in shares of Osborne plc, on the basis of this afternoon’s session in the Commons, you’d be urging your fellow commodity sellers to cheer the mantra of ‘Sell, Sell, Sell’. David Cameron and George Osborne has made a very grave error of judgment, as the pathology in the culture of the banking industry is not just restricted to the LIBOR fraud from Barclays. Don’t let the BBC deceive you – the Government has been proven to be a moral cesspit, and the country is completely exasperated.
Bob Diamond in a incoherent set of responses yesterday in the Commons Select Committee, best described as ‘implausible’, was unable to explain why senior ‘LIBOR’ setters, who had apparently been doing the job for decades, were oblivious to the emails from traders publicly wishing the LIBOR rate to be fixed. He had no explanation why it took so long to get to senior management, and provided that the compliance officers had had a duty to report criminal malpractices. This is reminiscent of the “shock” experienced by Rupert Murdoch when he found out about the morally repugnant phone hacking which had apparently occurred at News International. The problem is that ignorance is no defence in our law at least, where company directors are, despite promoting the success of the company, are supposed to act with due care, skill and diligence.
On 28 July 2012, Rachel Reeves claimed that the Chancellor made a conscious decision to exclude LIBOR from the Financial Services Bill in its current form, even when he must have known that a massive FSA investigation into the scandal. It is hard to know how corporate governance mechanisms have failed so dramatically in News International and Barclays, but there is nothing more off-putting to a corporate investor than a large company, albeit running profitably, committing openly criminal activity to pursue its aims.
This afternoon, Ed Balls utterly annihilated George Osborne’s speech, like taking candy from a baby. Balls effectively told him to ‘put up or shut up’, asking him effectively to prove his nasty allegations or desist from making them. The involvement of the Bank of England over LIBOR and the gilt markets is far from clear, and the only way to achieve a solution on this is an independent judicial-inquiry. It is a complete non-argument to say that it is too time-consuming and too costly, as those might have been the same grounds of opposition for the Leveson Inquiry which has gone a long way to showing that the pathology was substantially more than some ‘rogue reporters’. The parliamentary select committee is not able to examine witnesses with the skill of a lawyer, or QC, and probably yesterday afternoon was the best advertisement yet for a judicial-led inquiry.
While this issue runs-and-runs, there can only be lasting damage for David Cameron, whose personal poll ratings are at an all-time low. There will be no closure from a parliamentary inquiry, aided and abetted by the Liberal Democrats who are expected to be electorally obliterated in 2015. The most damaging label for David Cameron is that of the Flashman identity, of a man completely ‘out-of-touch’. The judiciary is the only lifeline for restoring the credibility of the legislature, and a judiciary-led inquiry is the only way for MPs as a collective group to restore their damaged reputation. Cameron is damaged signficantly, the country is most unimpressed, and this could prove to be fatal for this government.
