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Expert Comment: Change at Barclays

City of London Tuesday 3 July 2012

Rev Tony Bradley, Deputy Director, The SEED Centre, Liverpool Hope Business School and Co-Founder of The New Wilberforce Alliance/ Banking on Change, looks at recent developments at Barclays Bank

The 24hrs rolling news media runs fast at the best of times.  We might remember the opening line of Charles Dickens’  A Tale of Two  Cities: 'It was the best of times, it was the worst of times'.  At least in the City of London, the second half of that epithet is more pertinent today.  Certainly, the Chairman of Barclays Bank plc, Sir Marcus Agius, must have concluded over the weekend that it was, indeed, the worst of times.  A committed Catholic, Agius has at least had the dignity to step down. 

Dickens was writing about the two cities of Paris and London at the moment of the French Revolution.  Heads would roll.  His opening continues “...it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity...we had everything before us, we had nothing before us.” Well, in relation to the continuous feed of revelations about the degenerate, immoral and possibly criminal behaviour of a small minority in and around the City, these words could hardly be more pertinent. 

The wisdom lay with those who conducted 'flawed' practices. The foolishness seems to have belonged to those who oversaw and 'light touch' regulated the behaviours of investment bankers. Better if it had been the other way around. Belief seems to have lain with Government, the Treasury, Bank of England and British Bankers Association. Incredulity certainly describes the rest of us.  The question is: do we have anything or nothing before us?

A year ago the Governor of The Bank of England, Sir Mervyn King, stated:“We allowed a [banking] system to build up which contained the seeds of its own destruction…..and this has still not been remedied…” He said that we need “extreme measures” to solve the problems we face.  But things have gone from bad to worse.  This past week the same Governor has commented:  "From excessive levels of compensation, to shoddy treatment of customers, to a deceitful manipulation of one of the most important interest rates and now news of yet another miss-selling scandal we can see we need a real change in the culture of the industry" (my highlight).

On Monday 2nd July, David Cameron announced that the "far-reaching inquiry" into banking failures will be a Parliamentary Review.  It will be chaired by Andrew Tyrie, the ethically laudable Chair of the Treasury Select Committee.  But, to mount such an important inquiry in-house is dangerous.  It will be overseen by the very people on watch throughout this whole sorry crisis. 

The inquiry runs the risk of being seen as a whitewash, leaving ‘nothing before us’.  Of course, Ed Miliband’s call for a Public Inquiry could do much better, but is rapidly getting squeezed in the parliamentary process. Sadly, if such reviews are kept within the Westminster Village they are unlikely to assuage the public appetite for heads to roll, albeit not in the way of Mme Le Guillotine. 

No, to restore trust in the ethics of the UK financial services sector we must have an open Public Inquiry outside of political control, that will be equally challenging to Labour and Coalition alike.  It must be able to subpoena witnesses, be chaired by a judge and with the possibility of referring evidence to the Serious Fraud Office and the Director of Public Prosecutions.  This is the call in a new Peoples’ Petition to be released by Compass/ New Economics Foundation at 4pm today (3rd July).  See, also, Ann Pettifors Petition: http://www.primeeconomics.org/.

There are no guarantees of success.  Now, as the news of Bob Diamond’s resignation from Barclays has broken (07.55am), with Marcus Aigus coming back as their Chair, it may be ‘the best of times’ for him, again.  Such a public inquiry may just lead to ‘the best of times’, as well, for our relationship with the Banks.  Or we, as ordinary people, may simply be left wondering ‘what sort of interesting times do we live in?’

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