London is suddenly awash with people keen to give you their view on the LIBOR scandal, how it was always a truck out of control, how they always knew it was a cesspit, and how appalling it all is isn’t it? Large numbers of them are senior politicians (hypocrisy of the year frontrunner this one), some of them are media types who write on pink pages but didn’t bother until now to share with us their disgust…and some of them are those pundits pounced upon by the ignorant at the BBC and the Guardian once the news is in that strange distillery of information, the Public Domain.
There’s more than a little irony in this last area, because their normally self-publicising punditry has to somehow square the circle of being good at their jobs – that is, investment on behalf of clients – and being completely blind – that is, not noticing that Libor is variously a sham, a scam, a lie, and a tip-top hoodwinking practice fully approved by the British Bankers’ Association (BBA) to the point where the BBA serially lied about it in press releases stretching back five years.
One such pundit in recent days has been Terry Smith (above) of Fundsmith, a brand name suggesting Tel is not backward about coming forward. He’s a regular on Peston slots when Robert needs to suggest he’s up to speed – and was on Newsnight earlier this week as the Voice of Resistance to all those nasty bankers who’ve been manipulating Libor for years my goodness me what next.
Billing himself and his blog as ‘straight talking’, shoot-from-the-hip Smith must therefore find his boardroom an interesting place at the moment, given his most senior non-Exec figure of of respectability is none other than former BBA boss Angela Knight. (pictured)
Angela made a smart move two months ago, once the bubbling under Libor scandal was increasingly obviously not going to go away: she quit. Known as the Voice of the Banks, Knight is a vigorous defender of the City of London, a standpoint that is neither lofty nor safe at the minute. But to give her credit, Angie jumped ship just in time: otherwise she would today be trying to defend all those utterly mendacious press releases from the past.
In regularly explaining to us all why banker-bashing is a disgusting sport that should be banned immediately, Angela Knight was thus only conforming to type when she cancelled a banker bash last night….their Summer bash. She wrote everyone an email saying, ‘We believe that in the current circumstances it would be wrong to proceed with the reception on Wednesday evening. We regret the short notice but our industry needs to think long and hard about its collective behaviour and I am sure you understand this is not the time for such an event to take place. Regards, Angela Knight CBE, chief executive, British Bankers’ Association’.
Hat-tip to City AM for publishing the email. And yes, it is good to see Angela finally realising how she was duped over all those years when obviously she knew nothing at all about Libor cheating, her being a unimpeachable CBE. And former Conservative MP. Ooo-err. I do think more and more that this amusing Libor Party soubriquet may well catch on for the Tories.
But it does make you wonder why the BBC and Rolling Rusbridger are soaking up Terry Smith’s stuff, when the other side appears to be represented on Fundsmith’s board. Last March, for instance, the BBA, FSA, and Bank of England met to ‘discuss’ the Libor process. At the time, Angela Knight told the media that the review was part of “a normal reviewing process”. But that was probably a bit of a porkie, I think Ange – am I right?
Further back in time, asked by the Chairman of the House of Commons Treasury Select Committee Chairman on 13th May 2008, whether Libor “remains a relevant measurement”. (Hint-hint, nudge-wink etc), Angela Knight replied:
“LIBOR has stood the test of two decades….what Libor represents is the rate in the market, and that rate is fixed at 11 am every morning. The Libor rate has drifted up, but that does not mean that that is a problem with Libor. What it does is say this is what is happening in the market”.
But it wasn’t doing that was it, Angela? Did you mislead the Committee here? Or were you too incompetent as the head of the BBA to know it was already going on? Certainly, you sought to reassure and appease that committee, by adding:
“Libor is the rate at which a contributing bank would be prepared to borrow in the market [it wasn’t]….we have a sticky market out there, so it is not surprising that the rates move in different ways to the way they did when conditions were more benign [and every bank is lying about their borrowing rate]….I can let you have all the graphs and the details with pleasure [because you won’t understand which way to hold them up anyway]…..”
So just to sum up at 8 am GMT, 3rd July 2012: when it comes to bankers cheating (or helping the financial world out of a self-created mess), we cannot trust either of the last two Chancellors, the Bank of England, the CEO of Britain’s biggest bank, his Chairman, large donors to the Conservative Party, those who give evidence to select committees, or the British Bankers’ Association. And it may be a bit naive of the BBC and the Guardian to assume that straight-talking Terry Smith really does represent the put-upon ordinary investor. Or not. I couldn’t possible say for certain either way.
But surely we can trust the Bank for International Settlements? Er, not exactly, no: In its March 2008 Quarterly Review, the Bank for International Settlements stated that “available data do not support the hypothesis that contributor banks manipulated their [LIBOR] quotes to profit from positions based on fixings.”
They knew nothing. They were duped. Others can’t remember, or say it was nothing to do with them. It’s rather like Hackgate II, really. Bit by bit, Britain’s traditional reputation for honesty, probity and a word given in public is being destroyed by politicians, bankers, the police, the judiciary, lawyers, Peers, nhs managers, pr consortia, professional bodies, accountants……the list drones on forever.
There is nobody the Citizens of this country can trust any more. Who will give that trust back to them?