Diamond out......... pity the politicians did not ask for his sacking......
It will be interesting to see what level of pay out he receives.
As he left on a voluntry basis, he will not receive job seekers, one worries about how he will survive. It's a cruel world sometime, aint it...........
No good for cash (that tends to be a one-way street anyway!) but I get a supply of freepost envelopes to send cheques in. I never cease to be amazed at the sub-standard service people seem to be prepared to put up with from their banks. Vote with your feet guys -swapping banks is a really easy thing to do.
Diamond out......... pity the politicians did not ask for his sacking......
FWIW I believe Milliband has been calling for him to go since this came up. I believe it's called 'getting ahead of the wave' or something. All about spin and pr of course and far too little, too late.
I see we've had the announcement re:the inevitable inquiry and the parties are bickering on it's format. In the meantime Barclay's lawyers, senior management, the cheeky rogues responsible et al will be p#####g themselves that the outcome is likely to be a rough ride in the press for a week or two rather than an arrest and a criminal investigation.
Too much to hope that he resigned to get his affairs in order before he does some jailtime? Probably not but he should!
Sorry, I missed the part in your comment where you let us know what crime Bob Diamond committed in order to do some jailtime.
Something to do with him and his banking cohorts fixing rates in a fraudulent manner which has directly hit the already put upon man in the street. Ffs those of us who pay tax saved their arses and yet they STILL shit on us!
Too much to hope that he resigned to get his affairs in order before he does some jailtime? Probably not but he should!
Sorry, I missed the part in your comment where you let us know what crime Bob Diamond committed in order to do some jailtime.
Something to do with him and his banking cohorts fixing rates in a fraudulent manner which has directly hit the already put upon man in the street. Ffs those of us who pay tax saved their arses and yet they STILL shit on us!
Except this happened before the bail outs & whilst I have no warmth towards Bob Diamond he is certainly not personally reponsible. I do accept that he should resign as the Chief Exec.
Although there is a global problem, the specific issue with UK banks was created by UK politicians who decided to de-regulate the banking system to encourage global banking organisations to do their business in the UK as opposed to elsewhere in the world. This was done under a Labour administration, but in the circumstances would the Tories have done anything different?
Someone mentioned Thatcher - she made the decision that this country should move away from heavy industry and into the service sector. Part of the motivation for that is the unions aren't so strong in that sector... But that's a debate for another time!
I'd argue that the issue goes back to the mid 80's when Thatcher facilitated wholesale demutualisation of the building societies. Overnight she created a completely different banking culture based on short term profits and corporate and individual greed. Successive governments of all colours have allowed this to continue by failing to properly regulate them.
Whether this is because they enjoyed the fruits of the money made too much to bite the hand that fed them, because there was nothing else we could produce any more, becuase the banks all threatened to up sticks and leave, because that were terrified of being seen as anti-business or because they were worried about their future directorships after their life as an MP finished I dunno. Probably a bit of each.
Well I think you are both right. I too have had many years experience in the financial industry, I don't say banking because some of those years were at brokers.
I noticed in the eighties a change in culture that has stayed with us to this day. When gilts were traded through brokers if a mistake was made that meant a profit or loss due to market movement the parties involved would split it 50-50. When US Government bonds began to be traded we dealt with US banks, voice tapes were then required to establish who was correct in such circumstances and whoever had made the mistake took the profit or loss. This system took hold in more and more markets, the idea that you were both responsible for the transaction left us. That is just a small and probably not very good example of how the culture of trade changed.
I’m learning about game theory at the moment and that has a relevance to this because there were subtle changes in rules by which trade was done. Before the eighties the reputation of a firm was always a consideration in and trade after the eighties the only thing that mattered was the bottom line. If you brushed with the regulations it was ok as long as you got away with it. The closed market of the London banking scene with our discount houses and quaint ways became a global market. Instead of holding onto our high ideals the lowest common denominator was used. Traders saw other firms trading in a way that was previously thought improper, to keep up they had to emulate the rules of the game changed. Smith’s first treatise, greed is good became the dominant cultural norm.
This cultural change manifested in these two incidents at HBOS show how we had moved away from the banking system we had previously known and respected. An investigation into HBOS mortgage brokers in 2003 by the money programme found that they were systematically advising clients to lie on self certified mortgage application forms. HBOS then sacked a risk manager, Paul Moore in 2004 for daring to complain about the excessive risks being taken onto the trading book.
When Labour got in they made a crucial change that enabled to banks to carry on without fear of retribution from the BOE. Removing the oversight on such a crucial sector was pure and utter folly. What they did was to allow the sector’s regulation to fall between the FSA and the BOE, it was badly written but, its implementation was even worse. (It has to be said that they also took interest rate decisions away from politicians which has been very beneficial and should remain.) This meant that bank trading was effectively unregulated, lessons we had learned from the ‘.com bubble’ and the Barings collapse were lost.
Mervin king in a speech to the great and evidently not so good at Mansion House in 2006 warned of the problems ahead when he mentioned the huge risks being taken onto the balance sheets of some of those present and the expansion of M5.
Changes have also been made in retail banking with the separation of client and corporate banking at the branch. We all know that we no longer see our bank manager if we want to open a new business. You will see instead someone from the corporate division, a business advisor or relationship manager. A bank manager is simply a sales manager and staff are given targets for sales and sell regardless of the adequacy of the clients situation. Trust has been removed from the system at every level not just the top.
I noted that Doctors were on some form of industrial action last week though, after receiving 100% or better pay increases over the past ten years they take action because they will have to pay more for their pensions. I also note that some Solicitors were found guilty of milking the legal aid system to its fullest extent last month after an undercover investigation. We see too that politicians and Journalists closet each others company for mutual benefit, cosy relationships here there and everywhere are bringing our every sector of our lives into disrepute.
I’d blame multiculturalism but of course I can’t do that because its not politically correct is it?
Diamond out......... pity the politicians did not ask for his sacking......
FWIW I believe Milliband has been calling for him to go since this came up. I believe it's called 'getting ahead of the wave' or something. All about spin and pr of course and far too little, too late.
I see we've had the announcement re:the inevitable inquiry and the parties are bickering on it's format. In the meantime Barclay's lawyers, senior management, the cheeky rogues responsible et al will be p#####g themselves that the outcome is likely to be a rough ride in the press for a week or two rather than an arrest and a criminal investigation.
Bit concerned that the enquiry should just be about the Barclays scandal, and the LIBOR fixing allegations, although the nod and wink allegations from Diamond re: the Bank of England is to say the least worrying. Diamond is the media bogeyman, himself and the chairman, who is staying to appoint a new MD will of course be in the spotlight, but I think it goes a lot deeper than that. That is why there needs to be a public enquiry, led by a judge, giving evidence under oath to ensure that the reputation of the banks are purged from this damaging series of events. Danny Alexander seemed very unconvincing to me this morning. The Vickers report needs to implemented as soon as possible to firewall the banks from the high street stuff to the speculative markets. Frankly I think the banks have lost the trust of most people. But to get the economy back, we need a strong and effective banking system that supports the economy, and invest in business and create jobs. Alexander's comment that this is 'casino capitalism' is right, but his measures for dealing with this seem to be totally inadequate. The Bank of England and the treasury need to firm on this, even if it causes a short term problem in the economy.
Danny Alexander seemed very unconvincing to me this morning.
He seems very unconvicing every morning to me.
It's okay though because George promised on Today this morning that they were going to make sure that the retail banking sector was ringfenced from their investment arms just like Vickers recommend back in Sept. The advantage of this over complete seperation of the banks was that it would allow one part of the bank to raise funds from the other parts, according to George. A strange concept of ringfencing if you ask me but I'm sure they know what they are doing...
Sounds iffy, but I'm guessing they mean one of the following:
1. Profits from retail banking can be used to fund higher risk investment banking 2. Retail customers can be sold high risk bonds, again in order to fund higher risk investment banking
Anything other than that sounds like a recipe for disaster, with to many cop outs available (We thought we could use these funds from the semi-ring-fenced retails bank, etc.)
Too much to hope that he resigned to get his affairs in order before he does some jailtime? Probably not but he should!
Sorry, I missed the part in your comment where you let us know what crime Bob Diamond committed in order to do some jailtime.
Something to do with him and his banking cohorts fixing rates in a fraudulent manner which has directly hit the already put upon man in the street. Ffs those of us who pay tax saved their arses and yet they STILL shit on us!
Except this happened before the bail outs & whilst I have no warmth towards Bob Diamond he is certainly not personally reponsible. I do accept that he should resign as the Chief Exec.
I stand corrected CE. Still believe bankers are still legalised blaggers in suits. Just because they don't have sawn-offs doesn't mean they're not criminal.
Leeson was on the BBC today and made some good points about the regulatory process. Rather than wade in with another long post he was saying that people need to have the risk of going to jail because the individuals responsible know that a slap on the wrist and fine is the worst case scenario for trousering billions - and that kind of affects the individual's view of how morally wrong it is. To the points made by Ken and others earlier Diamond was not the person that was doing this, he's just a bogeyman: it's right that he should lose his job, but he wasn't the guy doing it, and probably wasn't even directly aware.
As for the point about the last Government making a massive error in de-regulation - this is clearly the case. It would be useful to know of the warnings and misgivings of those in opposition at the time. It seems sad and typical that political capital is being attempted from this.
Ed Milliband has asked for a judicial review in the knowledge that his party will probably not come out of it well but this is something too serious to be adjudicated by politicians- That is surely the only right thing to do. Yes, it will take longer- but let's get to the bottom of the problems and sort them out.
Morts - I agree with Leeson's points. Hopefully the SFO will get to the stage where they can proceed at the end of the month (their timeline) and they will be able to press charges.
The government should also insist that the other banks involved are made to settle this now or it will drag on and do more damage over the coming months. Given RBS have announced a number of sackings this week, I suspect the SFO will be busy in many offices.
One more point there...with the US involved in this, you can probably be sure that there will be a number of class actions being prepared and pretty sure that their authorities WILL press charges and take advantage of the one-way extradition treaty.
Muttley - yes, the last government did make a mistake in light touch regulation. Unfortunately, the opposition not only supported that, but wanted even looser controls. I'd agree with a judicial review on this...not sure politicians (or many journalists) are much better thought of.
How many bankers have been arrested following the credit crunch? - I bet it is quite a telling statistic. I saw the other week a pregnant lady was sent to jail because she colluded not to divulge who was actually driving a car that drove into her because they were young. She got no benefit from this misguided act. Wrong I know, but it sort of says something about the world we live in now, when people can lie and cheat and continue to benefit from their ill gotten gaines. Wow, we are even blaming the civil servants and unemployed for it all now!
Comments
"Give a man a gun ......and he can rob a bank.
Give a man a bank ......and he can rob the world."
;o)
Oh... bank
pity the politicians did not ask for his sacking......
It's a cruel world sometime, aint it...........
I see we've had the announcement re:the inevitable inquiry and the parties are bickering on it's format. In the meantime Barclay's lawyers, senior management, the cheeky rogues responsible et al will be p#####g themselves that the outcome is likely to be a rough ride in the press for a week or two rather than an arrest and a criminal investigation.
I noticed in the eighties a change in culture that has stayed with us to this day. When gilts were traded through brokers if a mistake was made that meant a profit or loss due to market movement the parties involved would split it 50-50. When US Government bonds began to be traded we dealt with US banks, voice tapes were then required to establish who was correct in such circumstances and whoever had made the mistake took the profit or loss. This system took hold in more and more markets, the idea that you were both responsible for the transaction left us. That is just a small and probably not very good example of how the culture of trade changed.
I’m learning about game theory at the moment and that has a relevance to this because there were subtle changes in rules by which trade was done. Before the eighties the reputation of a firm was always a consideration in and trade after the eighties the only thing that mattered was the bottom line. If you brushed with the regulations it was ok as long as you got away with it. The closed market of the London banking scene with our discount houses and quaint ways became a global market. Instead of holding onto our high ideals the lowest common denominator was used. Traders saw other firms trading in a way that was previously thought improper, to keep up they had to emulate the rules of the game changed. Smith’s first treatise, greed is good became the dominant cultural norm.
This cultural change manifested in these two incidents at HBOS show how we had moved away from the banking system we had previously known and respected. An investigation into HBOS mortgage brokers in 2003 by the money programme found that they were systematically advising clients to lie on self certified mortgage application forms. HBOS then sacked a risk manager, Paul Moore in 2004 for daring to complain about the excessive risks being taken onto the trading book.
When Labour got in they made a crucial change that enabled to banks to carry on without fear of retribution from the BOE. Removing the oversight on such a crucial sector was pure and utter folly. What they did was to allow the sector’s regulation to fall between the FSA and the BOE, it was badly written but, its implementation was even worse. (It has to be said that they also took interest rate decisions away from politicians which has been very beneficial and should remain.) This meant that bank trading was effectively unregulated, lessons we had learned from the ‘.com bubble’ and the Barings collapse were lost.
Mervin king in a speech to the great and evidently not so good at Mansion House in 2006 warned of the problems ahead when he mentioned the huge risks being taken onto the balance sheets of some of those present and the expansion of M5.
Changes have also been made in retail banking with the separation of client and corporate banking at the branch. We all know that we no longer see our bank manager if we want to open a new business. You will see instead someone from the corporate division, a business advisor or relationship manager. A bank manager is simply a sales manager and staff are given targets for sales and sell regardless of the adequacy of the clients situation. Trust has been removed from the system at every level not just the top.
I noted that Doctors were on some form of industrial action last week though, after receiving 100% or better pay increases over the past ten years they take action because they will have to pay more for their pensions. I also note that some Solicitors were found guilty of milking the legal aid system to its fullest extent last month after an undercover investigation. We see too that politicians and Journalists closet each others company for mutual benefit, cosy relationships here there and everywhere are bringing our every sector of our lives into disrepute.
I’d blame multiculturalism but of course I can’t do that because its not politically correct is it?
But to get the economy back, we need a strong and effective banking system that supports the economy, and invest in business and create jobs. Alexander's comment that this is 'casino capitalism' is right, but his measures for dealing with this seem to be totally inadequate. The Bank of England and the treasury need to firm on this, even if it causes a short term problem in the economy.
How do we get back to the way we were - I guess the answer is "we can't". So, how do we move forward from this point?
It's okay though because George promised on Today this morning that they were going to make sure that the retail banking sector was ringfenced from their investment arms just like Vickers recommend back in Sept. The advantage of this over complete seperation of the banks was that it would allow one part of the bank to raise funds from the other parts, according to George. A strange concept of ringfencing if you ask me but I'm sure they know what they are doing...
1. Profits from retail banking can be used to fund higher risk investment banking
2. Retail customers can be sold high risk bonds, again in order to fund higher risk investment banking
Anything other than that sounds like a recipe for disaster, with to many cop outs available (We thought we could use these funds from the semi-ring-fenced retails bank, etc.)
As for the point about the last Government making a massive error in de-regulation - this is clearly the case. It would be useful to know of the warnings and misgivings of those in opposition at the time. It seems sad and typical that political capital is being attempted from this.
Ed Milliband has asked for a judicial review in the knowledge that his party will probably not come out of it well but this is something too serious to be adjudicated by politicians- That is surely the only right thing to do. Yes, it will take longer- but let's get to the bottom of the problems and sort them out.
The government should also insist that the other banks involved are made to settle this now or it will drag on and do more damage over the coming months. Given RBS have announced a number of sackings this week, I suspect the SFO will be busy in many offices.
One more point there...with the US involved in this, you can probably be sure that there will be a number of class actions being prepared and pretty sure that their authorities WILL press charges and take advantage of the one-way extradition treaty.
Muttley - yes, the last government did make a mistake in light touch regulation. Unfortunately, the opposition not only supported that, but wanted even looser controls. I'd agree with a judicial review on this...not sure politicians (or many journalists) are much better thought of.