So Bob Diamond quits. I suppose it was inevitable ever since he sent a memo to his staff assuring them he was staying. However, apparently he’s left not because he did anything wrong – heaven forfend – but because politicians and the public are making a quite unwarranted fuss about the whole thing. So had he’d stayed he’d have been distracted from doing his proper job because of the tiresome need to answer a lot of impertinent questions from politicians (if George gets his way) or lawyers (if Ed does).
It does rather invite the question of what was distracting him from doing his proper job whilst his staff were busy fiddling the LIBOR numbers, but that’s really a matter for those inquiring politicians or lawyers. Mr Diamond’s reluctant and rather peevish resignation does underline the widespread view amongst his bank’s shareholders that he was still the best man for the job. That this diamond at least remained the bank’s best friend.
The right kind of inquiry for these circumstances is causing a political scrap, as I’ve indicated already. The Tories (I say Tories because the coalition’s other bit-part players seem to have been rather reticent on the matter) want something fast, furious, technical, and not too troubling. Labour wants a long drawn-out Leveson style farrago presumably because it would be more entertaining, and would also take sufficiently long for their own part in the whole messy business to have long since faded into the distance. It is, as so many political scraps turn out to be, a false choice.
The particulars of the LIBOR fixing scandal are indeed technical, need fixing sooner rather than later, and can’t be pushed into the long grass of a 500 witness soap opera. On the other hand, this particular scandal has occurred for a reason, or set of reasons, that are not technical, but cultural. They do need a thorough excavating, and to be subjected to the antiseptic effect of a prolonged public humiliation just like that being doled out to the media by Leveson.
For sure the LIBOR scandal could be relatively easily prevented from recurring by ensuring that it is in future under the purview of the regulators – if the regulators actually regulated anything which it appears they very often haven’t. That second problem – how regulation should work, and how the regulators, the institutions they regulate, and the government and political class should all articulate with each other – can’t be fixed between now and the autumn as the Government pretends.
So we don’t need to choose between quick and technical, and thorough and fundamental. We need both. And we need to consider whether the Mr Diamonds of the world are really banks’ best friends, or their greatest liabilities.