Discretion would typically dictate my writing about our nation’s declaration of independence today.
I will address that in short order but the ongoing scandal surrounding the Libor price-fixing is not taking a holiday today. All eyes and ears in the UK are focused on today’s parliamentary testimony of recently deposed Barclays (LON:BARC) CEO Bob Diamond.
Diamond and his former lieutenants at Barclays have already indicated that their defense will zero in on the Bank of England and specifically the BOE’s Michael Tucker.
I would think Diamond, other Barclays’ executives, central bankers at the BOE and Tucker himself might like to reduce their exchanges and what was understood within those exchanges to a simple misinterpretation. Wouldn’t that be convenient for all these heavyweights?
Not so fast.
The exchange between Tucker and other BOE representatives with Diamond and other Barclays’ executives deserves a full and thorough hearing. I believe we will only get to the bottom of that interaction and similar exchanges between senior bank executives and central banking counterparts on this side of the pond via an independent investigation.
That said, the Barclays’ defense of pointing the finger at central bankers is misleading. How so? The real question needing a full and thorough investigation and expose is none other than the following: When did this Libor price-fixing scandal start?
Details released to this point indicate Libor being rigged as early as 2005. Markets were not stressed at that point in time so there is no reason to believe central bankers would be complicit in this scandal at that period.
Will we really learn the answer to when this manipulation started during Bob Diamond’s testimony? I doubt it although I am hopeful that members of the committee questioning Diamond will aggressively address this line of questioning. The answer to that inquiry is critically important.
If trust on Wall Street and in The City is to be rebuilt then it will only happen if and only if the truth of the start date to this scandal is revealed. I think that information can only be revealed under the direction of an independent investigator with the ability to subpoena. Some may think I am overly harsh and others too deferential but I firmly believe the threat of a perjury charge and subsequent trial is a necessary condition to expose when this scandal really started. From there real accountability might be determined and adjudicated appropriately.
Then and only then might trust be rebuilt in our financial markets.