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The banksters at Barclays have today been found guilty of what is, in effect, market abuse. They deliberately worked systematically to manipulate the LIBOR rate and so screwed millions of customers out of millions of pounds. This is just dreadful and Barclays shareholders will now pick up a bill of £290 million to clear up the mess. The scumbag who runs Barclays, Bob Diamond, and a few senior colleagues have agreed to forego their bonuses this year as part of the mea culpa. But that is not enough. Diamond should go.
Foregoing a few million quid which Diamond would have received later this year and then paid tax on is no penalty at all. It is like me saying that I shall not shag a gorgeous Swedish blond bird I might just meet on the beach tomorrow. It is foregoing an uncertain amount of jam tomorrow, a meaningless gesture. But scumbag Bob reckons that this will be enough to allow him to stay on the gravy train keeping previous year’s bonuses, his obscene salary and his obscene bonuses going forward. As ever when a company like Barclays engages in high risk activities or in this case just plain fraud, if it gets away with it staff get most of the winnings ( you have to retain talent don’t you?) and if it does not shareholders pick up the tab. And as such there is no real incentive for Barclays to change its culture. Unless head roll – and it should be Diamond’s head rolling – this pattern of behaviour will continue and shareholders will inevitably suffer as a result.
Those who have read my witterings for some time will know that for two years a key theme has been to be short all UK banks but especially Barclays. In my view we will inevitably see the whole sector needing recapitalising yet again as the Eurozone falls apart and bad debts in the UK and abroad mount up. What makes Barclays a special case is that I can see no visibility on how and why it makes profits from its casino banking operations at Barclays Capital. I have no idea of Barclays exposure to complex derivative products that I am too thick to understand. I wonder if Barclays has much more of an idea. If there is a mega accident in the UK banking sector my money is on it being at Barclays a company where the culture is rotten and – judging by today’s news – that is not going to change any time soon.
