Banking: don't turn culprits into scapegoats

When Bob Diamond, Chief Executive of Barclays Bank, appeared before the House of Commons Treasury Committee in January 2011, he proclaimed that ‘there was a period of remorse and apology for banks – I think that period needs to be over.’

This week Barclays was fined a total of £290 million for having repeatedly lied about the amount it was costing the bank to borrow money. The time for apology may need to be kept open a little while longer.

Why did they lie? Because along with those from other major banks, their figures fed the rates for loans between financial institutions, notably LIBOR (the London Inter-Bank Offered Rate) and EURIBOR (the Euro Inter-Bank Offered Rate). Misleading figures could nudge those rates up or down to suit the bank or individuals within it.

The disclosure of this behaviour has unsurprisingly led to a hue and cry for Diamond. The haughty contempt he displayed to the Treasury Committee makes one feel he brought his own fate on himself. Besides, he took – he certainly didn’t earn – £18 million last year which makes it difficult to feel he deserves much pity.

Diamond in the rough:
his ilk need controlling not witch-hunting

However I’m grateful to @mulberybush, who gave me a timely reminder on Twitter that witch hunts are always ugly. Whether the victim’s a misguided youth drifting into criminality, an unorthodox thinker speaking out against received views or even an an enormously wealthy and arrogant banker.

The inclination to reach for a pitch fork and a torch, literally or metaphorically, is deeply entrenched in all of us and needs to be resisted.

So let me say at once that it’s all very well for David Cameron and George Osborne to hint that the behaviour of the bankers ought to be subject to criminal sanctions. If the behaviour wasn’t illegal at the time the deed was done, then it would be far worse to take legal action against its perpetrator than to let him get away with it: retrospective legislation, making it illegal today to do have done something legitimate yesterday, is the hallmark of the vilest dictatorships.

But in any case I’m not interested in seeing Bob Diamond sitting in a prison cell. I’m entirely indifferent to his personal fate. He stays as Chief Executive, he goes; he finds another job in the banking sector or he retires to live off his millions; I don’t care either way.

What matters to me is that he’s announced that he expects no bonus this year. Stephen Hester, his opposite number at Royal Bank of Scotland, has said the same, after the computer glitch that meant millions of accounts failed to update correctly. That has to be a good thing, because it was the temptation of taking casino or Mafia-style incomes that incentivised the bad behaviour of the banks.

Britain is preparing legislation to restore, at least in part, the division between retail banking, the kind most of us use, and merchant banking, the financial gambling where fortunes are lost (ours) or won (theirs). Though it won’t happen until 2019, it is a relief to know that the measure will in a few years begin to undo the damage done by the US repeal of the Glass-Steagall Act (which enforced the separation between the two sides of banking) in the 1980s.

That Act was introduced in the wake of the last great depression, in the 1930s. It was designed to limit the chances of such a depression happening again. Those previsions were repealed by Ronald Reagan, and his example was enthusiastically followed by Margaret Thatcher and all those who favoured making a ‘bonfire of red tape’ by removing regulatory safeguards.

The effect? 25 years of irrational, unfettered fortune-hunting in the finance sector followed by the collapse of 2008 from which we’re still suffering. We need to remember that particular chapter of recent history when people sing the praises of Reagan and Thatcher, as they do rather too often these days.

Such understanding matters far more than what happens to Bob Diamond or any other individual. It says that banking is supposed to serve industry and society, not to be their masters; but it recognises that the people who go into it are driven, as most of us are, by the desire to better themselves, or even by inordinate greed; without safeguards against that greed, the sector will poison us all. As it has.

That’s why the Bob Diamond and Stephen Hester affairs are important and encouraging. They are helping to create a healthier set of attitudes. And not a day too soon.

Having said that all that, I am still human. And when I see a man who said it was time for the banks to stop apologising being forced to apologise for the behaviour of his own bank – well, though I have great admiration for @mulberrybush, I can’t help feeling a certain satisfaction. I can’t help smiling.

Schadenfreude, I know, but it’s stronger than me and I enjoy it too much to stop.

At least I’m not hoping to see Bob Diamond in a prison cell, far less on top of a bonfire.

Just with the smirk off his face.

A handshake marks the end of some things, the continuation of others

When it comes to historic handshakes, it wasn’t right up there with the best of them – one thinks of the Bill Clinton-sponsored greeting between Yitzhak Rabin and Yasser Arafat, for instance – but even so something important happened when the Queen shook Martin McGuinness’s hand yesterday.

It was all so laden with significance. 

On the one hand, an anachronism symbolic of our times: a former leader of a terrorist organisation. But this one has laid aside the gun for good to embrace the opportunity of pursuing a political career (and is proving rather good at it). 

On the other hand, another anachronism symbolic of our times: a head of state who owes her position to birth alone. Sadly, she provides a fittingly reflection of the desire of a substantial majority of British people to be treated as subjects, not citizens.

A historic moment.
And she was in green. Is she a secret Republican?

Still, the Queen and McGuinness represented former adversaries – actually, former enemies – and by shaking hands they signalled the commitment of everyone involved to settle their differences peacefully in future. That is massively significant.

In addition, however, I’m also enthusiastic about how this event shows up those who make absurd claims along the lines of ‘we never talk to terrorists.’ Michelle Bachmann (remember her? she used to be quite prominent in US politics) said it last October, tackling Ron Paul (remember him? he had a brief moment of minor celebrity too): ‘We have an absolute policy: we don't negotiate with terrorists’.

The position is nonsense because the people it most makes sense to talk to are your enemies. You can talk to your friends any time, and there’s a real chance that you’ll all agree, but you won’t be a jot further forward. If you want a breakthrough, it has to be across the table from the people who would otherwise be trying to shoot you.

The policy of refusing to talk reached its zenith of stupidity under Thatcher in 1988 (something to remember when people wax nostalgic about her).

In an attempt to ‘starve the terrorist and the hijacker of the oxygen of publicity on which they depend’ Thatcher brought in regulations to prevent Sinn Feinn leaders’ voices being heard on broadcast media. Unfortunately, since the only way we were ever going to make progress in Northern Ireland was by finding common ground with Sinn Fein, what they had to say was of particular interest to the public.

So we had the glorious sight of Irish republicans being interviewed on British TV, their lips visibly moving, their expressions changing, their body language fluent, but their voices silenced. Only their voices. We could hear their words – just not spoken by them. Instead, actors would read out the words, precisely the same words the Sinn Feiners had used.

Political censorship is generally poisonous. But when all that’s being censored is the voice, not the words, then it becomes ludicrous too.

Come to think of it, a measure that was both poisonous and ridiculous sounds like an entirely fitting monument to the Thatcher government.

That we had a handshake yesterday to seal the end of the bloodshed and the misery is hugely important. Historic. But will it also end the kind of childishness in government that led to Gerry Adams’ words being pronounced by an actor? When Tony Blair announces he’d like to be Prime Minister again, it’s quite obvious that delusions among politicians are not about to melt away.

But that's just as well. Think of all the opportunities for entertainment we’d lose. Let’s be grateful for the occasional historic handshake. But let’s also be grateful when the clowns do something to laugh at. After all, they already give us plenty to weep over.

Hangover

It was such a sad sight, as I climbed off my train at St Pancras yesterday morning. A couple in their thirties, she wiping away his face-painted flag of St George.

The morning after the night before. We hadn't even had the party. Not really. But now we had the hangover (a state, incidentally, characterised by Dorothy Parker as ‘the wrath of grapes’).

England had yet again been knocked out of a major international football competition – on penalties. No-one had indulged many illusions about England’s chances in the European Championship, but such as they were, by yesterday morning they were crushed and bedraggled.

There are still a few cars sporting those flags some people like to jam in their windows, but even they were looking disconsolate. A mildly embarrassing reminder of a celebration that never happened, or even worse was indulged in too soon.

Disconsolate reminder
Like the empty bottles after the party. But there wasn't a party

Of course, I blame the game itself. Two hours it took, to score not a single goal, by either side. How can people sit through such a game? The players rush up to one end of the pitch to achieve nothing; then they tear down to the other end to achieve nothing more. Finally, they decide the outcome on something only marginally superior to the toss of a coin: a penalty shoot-out.

But I’d go even deeper. What is the point of a knock-out competition? I mean, in just plain utilitarian terms, it makes no sense. The greatest good for the greatest number, as good old Jeremy Bentham told us. But a knockout competition does exactly the opposite.

The European Championship finals included sixteen teams. Without even counting those who didn’t qualify, that means that fifteen nations are going to end up disappointed. Just one will emerge triumphant (and unbearable).

Where’s the percentage? With our Camerons and our Merkels, we need cheering up, not demoralising. What we need is the kind of game where everyone wins a prize. So we can say to the Germans ‘you may have won the most matches, but we had the prettiest team coach.’ Salvage a bit of pride. We need it.

Well, at least that competition’s all over for now. For us. Though of course the next disappointment is under way already. Wimbledon. Apart from the rain, we’re going to get the usual failure to break through of the British players. And worst of all, we Englishmen are going to have to get enthusiastic and then despondent about a Scot – the only Brit with even an outside chance of achieving anything.

And then – the Olympics! More silly flags. More face paint. More unrealistic expectations. More shattering disilllusion.

All against a background of the wettest summer since the Ice Age.

Oh joy.

Heart warming story

Since the Royal Bank of Scotland (RBS) went belly up, leading to a multi-billion pound bale out by the British taxpayer (in our generosity), the bank has laid off some 11,000 staff, a number that rises to 30,000 taken together with the National Westminster Bank, which also belongs to RBS Group. 

Last week, RBS ‘upgraded’ its computer systems. Since then, for six days, large numbers of RBS and Nat West clients have been unable to check their accounts, while in some cases salaries have not been deposited and standing payments have not been made. Apart from the union, Unite, no-one in the bank seems keen to make any connection with the job losses. 

Stephen Hester, Chief Executive of RBS Group, issued a statement announcing that ‘this should not have happened’. 

Smiling all the way from the bank:
Stephen 'it shouldn't have happened' Hester. A man for our times

I’m often told that we have to continue paying bank executives astronomic sums of money so that we can keep the best with us and not lose them to other countries. If you have to be one of the best to realise that a six-day computer failure is something that shouldn’t have happened, I dread to think what the next echelon, the ones we’d have to put up with if salaries fell, must be like.

That being said, Hester at least had the decency to turn down the near £1 million bonus shareholders voted him back in January. Not because he didn’t deserve it or anything, but because it created bad PR: a lot of people thought that it was a bit much for running a bank funded by the public and which was still making a £2 billion loss.

Instead, Mr Hester agreed to struggle by on his basic salary of £1.2 million. That’s nearly 60 times median earnings in this country, 24 times what an experienced nurse is paid.

Talking about nurses reminds me of the NHS. It’s lost some 26,000 staff in the last two years with the number set to rise to 50,000 or so. Can we expect a few glitches in healthcare too?

And will we find someone paid 24 times as much as a senior nurse to explain that deaths due to undiagnosed cancer ‘should not have happened’?

Liam Holden: slow steps towards civilisation

My father was anything but a radical lefty. In his life, most of which was spent away from Britain, he took part in only one election, in 1945, when he voted for the Conservatives or more precisely, for Winston Churchill.

Nevertheless, he held views that most conservatives would have found unorthodox. In particular, he loathed the death penalty. I think he was as moved as anyone by arguments against the cold-blooded taking of life, or against the facile equation between two lives embodied in the principle that someone who kills another deserves to die himself. But the argument that clinched it for him was judicial fallibility.

‘Death is the only sentence you can do nothing to correct,’ he would say. ‘Get it wrong and you can’t undo it.’

We can debate all the other arguments but that one does indeed seem unanswerable. Since you can never even begin to make amends to a dead man, then quite apart from any moral consideration, the only judicial system that can use the death penalty must be one that guarantees never to make an error.

So it was fascinating to read about the case of Liam Holden in the Guardian. He was the last man condemned to hang in the United Kingdom, for the terrorist murder of a soldier in the troubles in Northern Ireland. Back in 1973 his sentence was commuted, so instead he served eighteen years in gaol. Now his conviction has been overturned. Those years can never be given back to him, but at least he’s alive. As his lawyer puts it, the family are grateful ‘that they are dealing with a quashed conviction and not a posthumous pardon.’

My father would have been pleased about that, but he might also have had a comment to make about the grounds for the successful appeal.

Soon after the Second World War, having been recently demobbed, he worked with the British occupation administration in Germany. At dinner one evening with compatriots who were complaining about Nazi atrocities, my father mildly pointed out that the British too had not been above ‘taking a pair of scissors’ to captives who were suspected of having useful information they were refusing to divulge.

Soon after that unfortunate comment, he found himself being energetically thrown, fully clothed, into the hotel swimming pool. His dinner companions’ had just underlined the inanity of the statement that the truth never hurts. Only the truth has the capacity to hurt.

Liam Holden’s conviction was overturned because, among other things, he was held and interrogated illegally by the British Army in Northern Ireland. In particular, he was subjected to what we now call ‘waterboarding’. As the Guardian points out, Holden ‘loathes the term waterboarding.’ In his view, ‘It wasn't waterboarding. It was torture.’

Curious way to fight for freedom

In the West, we like to present ourselves as the moral superiors of those, in particular Moslem fundamentalists, whom we fight in places like Iraq or Afghanistan. It’s interesting to find that our habitual use of torture gores back a long way. We might do well to learn a little humility.

Doing away with torture and the death penalty would be the kind of advances my father would probably have classified, using one of his favourite terms, as ‘civilised values’.

Nearly 30 years after his death, it’s good to see civilisation taking another small step towards adopting some of them.

The longest day

This morning, when I looked out of the window at the muggy grey beyond, it became clear that the only times when there wasn’t a threat of imminent rain was when it was actually raining. That made it hard to believe that this was the day of the Summer solstice. Up here in the northern hemisphere, at least. The height of summer. The longest day. 

And with that rain sheeting down, it seemed to me it might feel extremely long indeed.

The date got me thinking of Stonehenge. Full of mystery, sometimes baleful, always inspiring, it’s an extraordinary place. It was built to align to the seasons and accommodate celebrations of the equinoxes and the solstices. I like to think of the druids out there in December, celebrating the turning point at the depth of winter when the sun turns and the days at last begin to lengthen again; and in June, surrounded by ripening crops, when they would thank the powers that govern the world for the blue skies and the warming suns of summer.

Their latter-day successors were out this morning to celebrate this key point in the calendar. Sadly, this is England. As the photos show, there were more anoraks around than long druidical robes. And they didn’t get to see the sun.

Sunless celebrations

Which makes me wonder whether my long-cherished image of their paleolithic ancestors doesn’t need revising. So I’ve come up with a new narrative which I believe is more plausible.


Picture an irascible stone age lordling summoning his Chief Druid to a conversation that might have gone something like this.

‘So, this Stonehenge thing. The one you’ve been building since my grandfather’s time. Is that it now? It’s finished, is it? Nothing further you’re going to ask me to fund?’

‘No, no, sir. It’s complete as it stands. Nothing more to add.’

‘Just as well. Bloody Sarsen stones. You’ve no idea how much the things cost, do you? And transport from Wales! Never did understand why you couldn’t use local stone. Wiltshire’s made of bloody rock, isn’t it?’

‘The Sarsens are special though, my Lord. And our Stonehenge is the very latest in Europe. We wouldn’t want to use anything but the best for it.’

‘Special, is it? I mean... I don’t want to point out the bleeding obvious... or encourage you to spend any more than you already have... but you do realise you haven’t put a roof on it, don’t you?’

‘Sir, a roof would be completely out of place. No, our Stonehenge is exactly right as it stands. A great monument of man’s gratitude to the spirit world for the clemency of the weather.’

‘Well, that’s not exactly working, is it?’ adds the king, glancing out of the window where rain is continuing to drizzle down the sky. ‘One of the reasons I was wondering about the roof, matter of fact. I mean, celebrating the solstice and all that stuff, you’re going to need umbrellas. And they haven’t even been invented yet.’

‘We shall manage, Lord, we shall manage. And a little rain will not dampen the spirits of your druids, knowing that they are surrounded by Sarsen stone and celebrating in the most powerful stone circle of the known world. Even though there's not that much of the world that we actually do know.’

‘Powerful, is it? Not working is it, though? Weather’s still crap.’

‘Well, sir, it may need a little help.’

‘Help? I knew you’d be asking for money.’

‘No, Lord, no. Money will not be required. A little sacrifice.’

‘Sacrifice? That is money.’

‘No, no, sir. The powers of the earth and air, fire and water, desire only human blood. No payment is required for humans.’

‘Well, that’s true. We seem to have plenty of people.’

‘Indeed, sir. With unfettered immigration, they have been pouring in from the continent.’

‘Yes, yes, I know. You’re always going on about the need to set quotas for immigrants. Well, maybe we can make a start on reducing the numbers through a few sacrifices. Not a bad idea.’

‘And, as you were saying yourself, Lord, some of the young people from the troubled inner villages have been restive. We could surely spare a few of them. They would make a fine sacrifice and also set an example to others.’

‘But will the powers of air and water and all the rest make do with all that? I mean, if we don’t want this riff-raff, why should they like them?’

‘Trust me, sir. They just require human blood. And the victims are all human. Even the foreigners.’

‘And it’ll work? We’ll get some decent weather?’

‘All the authorities agree, sir. A great Sarsen-built circle. Some sacrifices. Wiltshire will be the new Costa Brava.’

‘Well, I hope you’re right. Because if there’s another group we could do without, let me tell you, it’s Druids who don’t deliver. So be warned.’

But as we saw again this morning, it didn’t work. Not that the Chief Druid ended up on the sacrificing slab. He led a coup d’état supported by the faithful against the lack of true belief on the part of the Lordling. Who ended up on the slab himself. 


This led to the establishment of a theocratic regime in which the weather remained as lousy as ever but, with the Druids rooting out and sacrificing anyone who complained about it, everyone quickly realised that it was as good as it could ever be and it was a lot safer to be perfectly happy about it.

Thereby demonstrating the inexhaustible capacity of religion to bring consolation to Man for his painful lot.

The wonder of Stonehenge. And the English summer sky.

French tales of two sad women

How tough life is in politics. It’s almost enough to make me feel sorry for politicians. Were it not for the fact that for every one that gets into the game, there must be a couple of hundred who would leap to take over from them if they could.

It was yesterday’s French elections that reminded me of the tribulations of the politico’s life. I was moved by the sad cases of two fine women. 

Well, perhaps not that sad. And you’d have to be a slave to a kind of thoroughly inappropriate old-world chivalry to apply the word ‘fine’ to the second of them. 

The first was poor Ségolène Royal. She ran for president against Nicolas Sarkozy last time round, in 2007. Hers must have been one of the weakest campaigns I have ever been horrified to observe. The culmination was when a comedian phoned her pretending to be the Premier of Quebec, and she walked straight into the trap eyes wide shut, making indiscreet comments about regional independence movements that Sarkozy then used against her.

Soon after her defeat she separated from her partner of nearly thirty years and father of her four children, François Hollande. Yes, that Hollande. In a move that does her great honour, she supported his campaign for the presidency this time round, which meant overcoming her animosity towards the woman Hollande left her for, Valérie Trierweiler.

In a move that does her far less honour, she offered that support as part of a deal that would see her appointed president (speaker) of the French lower house of Parliament, the Chamber of Deputies. Of course to be given the job, she needed to be a Deputy (MP) herself and Hollande organised for her to be adopted as candidate for the seat of La Rochelle. Unfortunately, La Rochelle already had a perfectly good candidate from the Socialist Party, Olivier Falorni. 

He wasn’t wholly overjoyed with the decision to push him aside for Royal and refused to stand down.

Many, many years ago I lived for a while in the seedy but interesting borough of Leyton in London’s distinctly unfashionable East. Leyton had been the setting for a remarkable event in British political history. In 1964, Labour returned to power after 13 years in opoposition. Sadly, the Labour spokesman on Foreign Affairs, Patrick Gordon Walker, lost his seat in the general election. The new Prime Minister, Harold Wilson, however refused to give up on his desire to appoint Gordon Walker Foreign Secretary. The sitting MP for the solid Labour seat of Labour was persuaded to resign to make way for Wilson’s man.

The people of Leyton were having none of it. For the only time in its history, the constituency elected a Conservative and Gordon Walker was left to lick his wounds.

It’s a good lesson. It isn’t always smart to treat the electorate as if they were just ballot fodder, only there to help stars of the political scene further their careers. 

Poor old Ségo. She’s just made the same discovery. The people of La Rochelle turned out for the dissident Falorni and denied her the seat she sought.

What makes her case all the more curious is that Trierweiler, the new girlfriend of her ex-boyfriend and new President, who it seems loathes her predecessor, had tweeted her support for Falorni. The scandal that ensued may not have lost Royal the election but it certainly didn’t help.

Who said that hell hath no fury like a woman scorned? In this love triangle, you might have thought Trierweiler was the woman blessed. But it clearly doesn't do to cross her. And apparently you cross her just by being the wounded party in the triangle. 

Ségo: just one things after another

Whose was the other sad, or perhaps not so sad, tale? 

Why, Marine le Pen’s, in the northern constituency of Hénin-Beaumont. The worthy daughter of Jean-Marie le Pen and his successor as leader of the National Front, she has done much to raise the tone of political discourse in France. For instance, by launching a controversy over the domination of the French meat trade by Halal products. She turns out not to have been completely wrong: it seems that as much as 2.5% of meat on sale in France is Halal. That means that you only have 39 chances out of 40 that any piece of meat bought in the country will be non-Halal.

It seems that not enough people are that bothered. Despite her remarkable score in the presidential election, where she took 18% of the votes in the first round, she lost in Hénin-Beaumont. And by a mere 118 votes. How frustrating must that have been? Particularly as her upstart niece has managed to get herself elected in the South, to become the youngest MP in the country.

Oh, the bitterness of it for Marine. 

My view? Couldn’t have happened to a more deserving person. 

Marine: deserving case