The Libor scandal may destroy the preeminence of the City of London July 3, 2012 THE 2007-8 banking crisis was a disaster for London’s international position as a banking centre. But financial services is much more than just banking. It includes areas such as insurance (in which London’s position is strong internationally, though by no means dominant) and securities and broking – in which London had every prospect of remaining [...]
The paradox at the heart of the Bank of England is now clear for all to see July 3, 2012 THERE is a contradiction at the heart of the Bank of England, which may be laid bare today. It is this: the Bank is above the markets and yet intimately involved in them. The twin spheres – Sir Mervyn King’s lofty world of monetary policy and econometrics and his deputy Paul Tucker’s world of market-makers, [...]
A leading barrister considers the case for prosecutions July 3, 2012 IN 2011, the Serious Fraud Office (SFO) decided not to investigate allegations concerning Libor manipulation. At that stage, one reason was that it did not have the necessary resources to take on such an investigation. Although the FSA has conducted its own investigation, the results of which will have been passed to the SFO, the [...]
Is it right that Barclays should be taking all the flak for the Libor-fixing scandal? July 3, 2012 YES Neal Lawson Barclays is getting its comeuppance. Where people break the regulations of their industry or the law of the land then they should face the appropriate punishment. We don’t know how deep the rot is – the question is how to find out? Because while Barclays, and maybe others, did it, it was [...]
RAPID RESPONSES July 3, 2012 The firing line There is no doubt that an inquiry is called for in the Libor manipulation saga, but the fines should be targeted at the dealers and the management, not the banks. Shareholders did not have a say in the internal dirty dealings, nor did they share much of the loot. Bonuses mostly went [...]
Germany’s economy is only king in the blind valley of the Eurozone July 2, 2012 In the present debate on the euro crisis, Germany is frequently portrayed as a model of economic strength, a beacon of fiscal prudence and a proponent of structural reform. Her resources seem endless and her government debt an indisputable safe-haven. If only Germany shared her strength and resources more generously, the euro debt crisis could [...]
The science of measuring the money supply can be artfully constructed July 2, 2012 I WISH people were banned from talking so loosely about the money supply. It’s like someone telling you that “the London underground station is closed”. Unless you know which one, it isn’t very helpful. There are a number of ways to measure the money supply, but the main problem is that they often fail to [...]
Libor needs swift modernisation to recapture trust July 2, 2012 WE SHOULD be under no illusion about how catastrophic the failure of the Libor rate setting mechanisms has been. There has been widespread manipulation of the most important price of risk. And we don’t need reminding how important the price mechanism is for the allocation of everything from goods to services, and of course capital. [...]
Would a vote for Scottish independence in its referendum be boon for its businesses? July 2, 2012 YES Stewart Hosie Scotland is a country rich in opportunity and bursting with innovation, but sadly this does not translate often enough into greater commercial opportunities. Independence will provide us with new tools – tax credits for example – to deliver a step-change in Scotland’s research and devlopment. Independence provides greater scope to shape the [...]
RAPID RESPONSES July 2, 2012 Winners and losers [Barclays chair was right to resign over scandal, yesterday] Bob Diamond should be applauded for having led and very successfully grown Barclays’ investment banking operations into a global titan. But an operation or organisation typically reflects the standards and behaviours of its leaders, especially if the leader has a strong personality. Philip [...]