Greedy. Arrogant. Amoral. So what a disgrace bankers STILL haven’t been punished

TO THE accompaniment of the finest wines and a rack of lamb, Barclays chairman John McFarlane and chief executive Jes Staley entertained senior financial journalists at the swanky Morton’s club in London.

Amid this bonhomie ten days ago — which began with a jokey welcome speech and upbeat report from the Barclays bosses — there was no hint whatsoever that another major financial scandal involving the bank was about to be exposed.

But then, perhaps, that’s no surprise since arrogant insouciance has been the trademark attitude of the banking industry over recent years, alongside an appalling sense of entitlement. But now we know Barclays

was facing two very worrying problems. First, the chief executive was being investigated by financial regulators for the serious offence of trying to unmask a whistleblower who had raised issues about a senior executive.

Criminal

And then there was Barclays’ alleged complicity in the case, revealed yesterday, in which Bank of england and government officials have been accused of putting ‘serious pressure’ on Barclays staff to rig interest rates on the Libor (London Interbank Offered rate) which crucially sets the cost of global borrowing.

Both these cases call into grave question the ethics behind the bank’s practices.

As a result, Barclays is being investigated by the Bank of england and the Financial Conduct Authority over how Staley (hired from New York’s J.P. Morgan investment bank to restore Barclays’ reputation and prosperity) used his bank’s security team and federal officials in the U.S. to track down the whistleblower.

This drama follows a period of internal tension among Barclays executives that had been ratcheted up in the wake of the controversial recruitment by Staley of former colleagues from J.P. Morgan and Wall Street for the most lucrative jobs at the bank.

Now this dirty business has been made public, Barclays’ board says it will censure Staley and will impose a ‘significant cut’ to his bonus.

This could not have come at a worse time for Barclays and — more importantly — for public trust in Britain’s banking system, which has already been hugely damaged by a series of scandals.

Nearly a decade after the financial crisis erupted, the UK’s banks are still embroiled in a series of criminal, legal and regulatory cases which clearly suggest they still have a culture of dishonesty and incompetence.

Against this shabby background — with countless examples of unscrupulous behaviour ( much of it undoubtedly illegal) — I find it astounding there have been so few criminal cases brought against those responsible.

Instead of chief executives or chairmen facing charges, it has been only minor figures who have been brought to account — such as a UBS trader found guilty of manipulating Libor rates.

No senior executive or board member has been brought before the courts on either side of the Atlantic.

And if this serial rule-breaking and attempted cover-ups of scandals were not damaging enough, we have witnessed the shameful way banks have encouraged Britain’s personal debt mountain to mushroom through lax lending policies on credit cards and loans.

This threatens to turn Britain’s current economic boom into bust.

Credit card debt has risen to its highest level in 11 years.

British families owe a total of £67.5 billion on credit cards — cynically enticed to run up huge debts through unsolicited increases in their spending limits and the use of so-called ‘ teaser’ zero interest deals that specifically target poor families and encourage them to borrow more than they can afford.

Wherever you look, there seems to be a serious question mark over the integrity of the banking industry.

For example, there is deep disquiet over Lloyds, whose former and current senior management are under investigation over what they knew about fraudulent activity at their branch in reading.

In February, six bankers were jailed for ripping off small business customers to the tune of £245 million.

Consistently, Lloyds bosses have claimed they were unaware of the criminal behaviour of its staff. But as well as devastating customers of the branch, the fraud is expected to cost Lloyds investors £250 million in likely compensation payments.

The truth is senior Lloyds executives knew of the scam as long ago as 2008 but were anxious, it has since been revealed, ‘not to disclose’ the cost to investors. They wanted to cover it up.

Also, Lloyds’ reluctance to pay compensation to victims of the reading crime until forced to do so is a damning indictment of a bank whose chief executive, Antonio Horta Osorio, is struggling to recover his reputation after being exposed for having an extramarital liaison with a woman while attending a conference.

Fixing

Meanwhile, at Britain’s largest bank, HSBC, its annual report revealed 37 separate legal cases over business lapses — ranging from moneylaundering to charges of trying to win the favour of the Chinese authorities by hiring senior local officials’ children.

As for Barclays, there can be fewer charges that are more serious than the accusation of working with the Bank of england and the former Labour government to lower interest rates.

Thanks to BBC journalists, we now have evidence that Barclays, claiming it was acting on the authority of the Bank of england, deliberately set about fixing the Libor interest rate during the peak of the financial crisis.

Barclays is also mired in a whole series of other major legal cases.

The Serious Fraud Office is deep into a long investigation into whether the bank paid unlawful commissions to Middle east investors from Qatar when it raised almost £12 billion of new capital during the credit crunch in 2008.

On another front, Barclays’ boss Staley is fighting the U. S. Justice Department, which wants to levy a multibillion fine on the bank over its handling of securities based on so- called subprime mortgages.

Ruthless

These are the vast quantities of loans made by banks to U.S. homeowners who could never pay them back — a scandal that was at the root of the world financial crisis.

As for Staley’s deeply embarrassing formal reprimand and bonus-cut after breaking rules over the whistleblower, the board argues that its chief executive was simply acting in the best interest of the bank.

However, I find it extraordinary that a banker of Staley’s experience and seniority felt it was acceptable to intervene in such a case, particularly considering that whistleblowing is officially recognised as one of the most important means by which banks are able to protect their values and the trust of the public.

After the humiliation of bank collapses and subsequent bailouts by taxpayers, the British people had hoped that our financial institutions had learned their lesson.

A new regulatory regime was put in place designed to end the greed, arrogance, amorality and shoddy business methods that precipitated the worst financial crisis for 80 years and which has cost every man, woman and child in this country an estimated £20,000.

But, sadly, the latest series of scandals shows how little has really changed and how ruthless bankers are still holding the British economy and financial stability to ransom.