Member Article

LIBOR Where do we go from here?

Marcus Agius, Bob Diamond, and most recently Jerry Del Missier have now all fallen on their swords.

Today I heard Bob Diamond give evidence to the Treasury Committee and I have to say that I thought he gave a robust performance. I thought it was interesting that he said that he did not feel that he had been instructed by the Bank of England to suppress LIBOR, although Jerry Del Missier apparently felt differently. It is this discrepancy on which the traders are pining their defence hopes.

Should Bob Diamond have gone? Well, I do not for one second think he colluded with this behaviour and I also think he has been an incredible leader, taking Barcap from being a second division operation into one of the worlds leading investment banks. The takeover of Lehmans was an inspired deal. On the other hand in his role as CEO he was ultimately responsible. He will be missed.

He said that when he learnt what the traders had done he was physically sick and that he thought the behaviour was reprehensible – a clear message indeed!

The question now has to be how many other members of the senior management team need to be sacked? This is not an easy question to answer. Many of those in senior positions should have known what was happening and could therefore be said to be responsible. On the other hand many of them are highly skilled people and not easy to replace. Barclays is still a world leading company which creates substantial wealth for the UK and we should not lose sight of this fact.

What needs to be done to restore public confidence? Unfortunately there has been a lot of unnecessary hyperbole in the press which has captured public opinion. So any solution needs to be not only effective but also very obvious and well publicised.

My view is that Barclays needs new blood – new senior management from outside who are not tainted by this issue in any way. They can then draw a line under it and start to rebuild. An important part of this rebuilding will be the re-introduction of rigorous regulation and for this regulation to be implemented by an independent third party.

Throughout this issue it has struck me that senior Bank of England employees, high street bank directors, and politicians have become far too close. There needs to be a greater degree of separation to ensure that these conversations take place only through official channels and are formally minuted to prevent any misunderstandings.

Phil Dibbs

Managing Director

Hawkmoor Associates Limited

www.hawkmoorassociates.com

phil@hawkmoorassociates.com

www.twitter.com @hawkmoortweets

07866362333

This was posted in Bdaily's Members' News section by Phil Dibbs .