What regulators appears to have uncovered is a scam at the heart of a £350tn market; one that ultimately affects how much families pay on their tracker mortgages, as well as the costs of transactions for big City institutions. It should not be settled with a fine, no matter how large, but must be followed up with a further investigation into Barclays – making public just how many employees took part (rather than yesterday’s mentions of Trader C and Manager E), and how they will be punished, up to and including criminal proceedings. Not only that, but it also needs to be uncovered just how far this market-fixing went. Certainly, the clear implication of yesterday’s comment from the Commodity Futures Trading Commission that Barclays’ staff “co-ordinated with and aided and abetted traders at other banks” indicates that Mr Diamond will not be the last chief executive in the firing line over this issue.
Strip away the acronyms and the charges against Barclays are straightforward. Its traders and senior management are accused of tampering with two key interest rates to bolster their own profits. And they apparently did this not once, but repeatedly over four years. Indeed, the practice seems to have become so widespread that staff joke about it in emails: “Always happy to help, leave it with me, Sir.”; “Done … for you big boy”; “I love you”. This from the bank that earlier this year held citizenship days for its staff – and which, through state guarantees and emergency provisions of liquidity, has been supported by the British taxpayer.
There has been much talk about banks being too big to fail, or too big to bail. The picture presented by Wednesday’s charge sheets is altogether simpler: throughout boom and bust, Barclays staff saw themselves as being too big to play by the rules. And the likely result is that everyone else paid millions more than necessary to borrow. What’s more, they do not look like the only ones: this has all the makings of systemic scandal.