Cable wants Barclays to face police probe

By
Rise up against weak bank bosses, business secretary urges
Rise up against weak bank bosses, business secretary urges

Bankers responsible for the Libor scandal should face a criminal investigation, Vince Cable has said.

The business secretary said he agreed with former Metropolitan police commissioner Ian Blair in an appearance on Sky News' Murnaghan programme.

His comments will put real pressure on the Met to instigate an investigation into the Libor scandal, which resulted in Barclays being fined £290 million last week for manipulating interbank lending rates.

"Anybody, the youngest detective, would say this is conspiracy to defraud," Blair said.


"It can mean nothing else. And therefore someone has to launch a criminal inquiry into this behaviour."

Such a probe could extend well beyond Barclays. HSBC, Citigroup and RBS are among other banks known to be under investigation in relation to manipulating Libor and Euribor rates.

Cable said his instincts were to agree with Blair, stating: "[The public] just can't understand why people are thrown into jail for petty theft and these guys just walk away having perpetrated what looks like conspiracy."

Overnight he had urged Barclays shareholders to demand change at Barclays, calling on "the owners" of the high-street bank to confront its leaders.

In an article for the Observer newspaper Cable attacked the governance at Britain's top banks of being "lamentably weak".

"No one at the top of Barclays will take responsibility for systemic abuse," he wrote.

"Shareholders, the owners, have a major responsibility here. I am bringing in legislation to strengthen their control over pay and bonuses, through binding votes, but shareholders have to get a stronger grip on weak boards and out-of-control executives."

The government is going to push through the Vickers reforms splitting banks' retail and investment arms, and help banks ensure they have "both capital and liquidity" to prevent the risk of further collapse.

But Cable acknowledged that the financial services sector faced a "moral quagmire of almost Biblical proportions". He defended the "urgent independent review into the operation of Libor and of professional standards", which could lead to the insertion of changes via the financial services bill currently working its way through the Commons.

Shadow chancellor Ed Balls yesterday spoke out against the coalition's Libor review, demanding instead a "proper independent and public inquiry into the culture of banking".

"Even when this scandal was starting to emerge in March this year, when we
raised this issue as the financial services bill was being debated, why did
Treasury ministers complacently refuse to even consider change?," he asked.

"Why has the chancellor been so reluctant to act?"

Cable addressed the opposition's demand for a Leveson-style inquiry in his article.

He commented: "It would certainly be enlivened by Ed Balls explaining why, in government, he allowed the regulatory mess to occur in the first place."

Politicians' links with the banking sector, as well as its failures in regulating the City, are attracting headlines this weekend.

The Independent on Sunday newspaper highlighted Conservative party deputy chairman Michael Fallon's links with a brokerage firm which, it reported, dominates the rates market.

Barclays' chief executive Bob Diamond has been asked to appear before MPs on Wednesday to answer questions about the Libor scandal.

The Treasury committee's chair Andrew Tyrie was quoted by the Observer as saying: "The reputation of Britain's financial services industry has been severely tarnished, albeit unfairly for the overwhelming majority unconnected with the scam.

"The public's trust in banks has been even further eroded. Restoring the reputational damage must begin immediately."

Barclays' non-executive board members, including chairman Marcus Agius, will appear before the committee on Thursday.

Shadow chief secretary to the Treasury Rachel Reeves said Diamond had a "final opportunity" to explain himself when he faces MPs.

"Then we can make a judgement about whether he should stay or not," she told BBC1's Sunday Politics programme.

"But at the moment I'm far from convinced that he should be in his job at the end of the next week." 

Comments

Load in comments