Keeping the bankers shackled

CHEERS rang out in Southwark Crown Court as former ICAP broker Darrell Read joined five other former City traders in being given a free pass by the jury over charges they conspired to rig Libor interest rates.

The easy thing would be to describe this as another bloody nose for the Serious Fraud office. or to take instruction from the Wall Street Journal and see this as a moment to put the brakes on criminal bankers.

Having already obtained a solid conviction against Tom Hayes, the trader now serving 11 years for manipulating Libor, it would have been distinctly odd if the crew on the other side of the crime, working for City money brokers, had not been tried.

That they were acquitted, in the face of the angry public mood about cheating bankers, speaks volumes for the fair mindedness of British juries.

It does not make the case for settling these matters behind closed doors in the shape of shoddy deals between bankers and regulators. Moreover it does no harm, in improving the behaviour of bankers and traders, to know that the authorities stand ready to throw the book at City traders and bankers who in search of an edge and higher rewards are willing to cheat clients.

The idea that the SFo should desist from bringing further interest rate manipulation trials to court, or be deprived of its so called ‘blockbuster funding’ because of this setback, is dotty.

Aside from the banking cases still to come, including allegations that Barclays paid illegal commissions to Qatar in its 2008-09 fundraisings, there are critical cases being built against Tesco, GSK and Rolls-Royce all of which go to the heart of integrity in business.

It is not yet time to forgive and forget the behaviour of bankers. The appalling culture seen in the buildup to the great financial crisis went on long afterwards, with mis-selling of consumer products such as payments protection insurance, money laundering, sanctions busting together with rigging in almost every market imaginable from energy, to foreign exchange and ‘dark pool’ share trading.

The regulators reassuringly have not given up on chasing down the bankers, including former chief executives James Crosby and Andy Hornby, who brought HBoS to its knees leading to the loss of tens of thousands of jobs and depriving investors in HBoS and Lloyds of their savings.

Their behaviour had been a stain on capitalism and justice must be allowed to run its course.

The chief executive of one of Britain’s biggest banks told me recently banking will not be cleaned up until some of those responsible for dishonest practices are seen leaving the trading floor in handcuffs.

Take the money

SHELL shareholders were always likely to be the biggest obstacle to the £36bn takeover of BG Group.

As the oil price fell and the cash element of the deal became more valuable, BG investors, who included an army of ‘Tell Sids’ left from three decades ago, were certain to be enthusiastic about an exit, and in the event cast 99.53pc in favour of a deal.

Plans by Shell chairman Ben van Beurden to change Shell’s model by switching towards cost-light production and away from grand projects clearly make sense, especially in an era of lower energy prices.

The task will be to fight a path through the treacle layers at Shell to deliver the pledges.

Shell is paying top dollar for BG but could have trouble selling assets for good prices if the oil price remains stuck in the sludge. Execution is critical since the present deal does not become cash flow positive until $50-a-barrel or profitable until it almost doubles the present price.

The longer the energy glut the greater the pressure on van Beurden.

Tanked up

IVAN Menezes is one of those chief executives who has suffered from having inherited from a dominant predecessor Paul Walsh.

World economy permitting, it now looks as if he could refurbish Diageo. The return to growth in Europe, the embrace of Guinness in Africa and the strength of demand for Bulleit bourbon and Johnnie Walker in the US looks to be helpful.

Currency movement make things hard in emerging markets. But the worst of China’s consumer slowdown looks to be behind it.

Menezes has hope for his native India, where whisky drinking is an old habit.

The rise in the dividend and the improved prospects in America should mean a smoother ride.

Last rites

Farewell to the New York Stock Exchange as we know it.

Barclays, the last bank standing on the floor of the Big Board, has sold its seats and the capacity to trade up to 1,200 shares to electronic platform Global Trading Systems.

The showmanship of loud bells and clapping at the opening and trading may remain in place.

Those patrolling the floors are now mainly engineers and talking heads rather than real traders.

Pity…