Top of the Agenda: Barclays CEO Resigns Amid Interest Rate Scandal
The CEO of UK-based Barclays, Robert Diamond, resigned today over the bank's involvement in rigging a vital interest-rate benchmark (WSJ). Barclays agreed last week to pay $453 million to settle a UK and U.S. investigation that demonstrated traders at the bank had intentionally manipulated the London interbank offered rate, the Libor. Other global banks being investigated by UK, U.S., and Asian authorities include Citigroup, Deutsche Bank, HSBC, JP Morgan Chase, and Royal Bank of Scotland.
"Yet the government itself has still to grasp fully how much things must change. It is pushing through parliament a half-baked scheme that would in future 'ring-fence' the investment banking operations of the banks from their high-street banking operations. This misses the central point: it is the culture of the casino that has done the damage, and it will continue to infect the whole of the banking industry for as long as the two sets of operations operate together," writes Philip Stephens for the Financial Times.
"Four years ago Lehman toppled, and society learned that complex derivatives that were supposed to spread risk around efficiently instead concentrated it catastrophically. If that was a figurative fraud, something closer to a literal one is now being uncovered. Bankers said untrue things about the price they would have to pay to borrow money, with a view to reaffirming the hardy reputation of an institution which was energetically stuffing their pockets," says this Guardian editorial."Under any new system of regulation, the spirit of the law must be as important as the letter: bankers should be set clear standards of behavior, with swift and exemplary punishment for those who transgress. This is something that has long been the norm in America, but is far less common in this country," says this Daily Telegraph editorial.