If there is one thing that produces boiling anger amongst the general public, it’s that the bankers who’ve brought this country to its knees have walked away unpunished. Despite criminal negligence, if not outright incompetence and irresponsibility, which has cost millions their jobs, pay cuts and loss of public services, they get off scot-free after plunging the nation into eye-watering debts of hundreds of billions, yet burglars or thieves who purloin a few hundreds or thousands are sent to prison. The bank bosses of RBS, Lloyds and HBOS were eventually eased out of their jobs, but none was prosecuted. One rule for the bankers and the rest of the elite who administer the rules in their own interest, and another for the rest of us.
This mutual protection society, otherwise known as the Establishment, is now faced with misdeeds on such an egregious scale that even they may find it difficult to close their eyes to them. Barclays traders have been found trying to rig LIBOR (London Inter-Bank Overnight Rate) so as to get a big increase in their own profits at the expense of the cost of borrowing for millions of customers around the world. US regulators have already imposed a fine of £230m on Barclays for this huge scam, stretching back with repeated breaches of the rules to 2005, plus the UK’s FSA (always behind the curve and much less robust) have added another £60m fine.
But those fines are simply subtracted from Barclays’ profits which annually work out at £5bn or more. The perpetrators holwever of this corruption suffer no personal penalty, at least till now. Diamond, currently chief executive of Barclays, was throughout the relevant period running the division where the misconduct took place. He should be held accountable for this misappropriation, charged, and if found guilty, jailed. Merely losing his job is not an adequate penalty for dishonest corrup;tion on this scale.
It’s not the first time that Barclays has been found engaging in abusive and disreputable practices. Despite Diamond proclaiming the bank’s commitment to acting as a ‘good citizen’ – a nauseating irony it now appears – Barclays had previously engaged in aggressive tax avoidance in two artificial contrivances involving £500m, and even today is now being hit by yet another disgrace as revealed by the evidence of a new mis-selling scandal.
This test case raises other issues too. There must be a case for reviewing the over-protectiveness afforded by the doctrine of limited liability. It was originally three centuries ago meant to protect the directors of early capitalist organisations in taking reasonable and proper risks from any personal comeback from shareholders if economic conditions adversely affected thye fortunes of the company. They were never designed to protect managers from accountability for dishonest or corrupt behaviour or actions of extreme incompetence or negligence which seriously damaged the interests of borrowers, depositors, shareholders or the public. In cases such as the present one this doctrine should be suspended in imposing significant financial penalties on the perpetrators themselves, if convicted.