The Commons report on the rate-fixing scandal may not fully explain what went on at the bank, but it is surely right to condemn 'a prolonged period of extremely weak governance'
The report by Andrew Tyrie's committee of MPs on the Libor-fixing scandal is a good read, unless you happen to be one of the characters mentioned in the 122 pages. For example, on the vexed topic of the role of Bank of England deputy governor Paul Tucker, and whether or not he encouraged Barclays to reduce its Libor submissions, the report concludes that the bank "did not need a nod, a wink or any signal" to reduce rates. "The bank was already well practised in doing this."
Remember that the fines against Barclays covered two periods – from 2005, when Libor submissions were being distorted to potentially make profits, and the period during the banking crisis, when the submissions were being lowered to avoid the negative publicity that a high rate might attract.
In fact, the MPs' report correctly makes the point that the conversation between Tucker and the former Barclays boss Bob Diamond that took up so much of the Treasury select committee's time is probably a bit of a "smokescreen", distracting from evidence that individuals had been attempting to manipulate Libor a full three years before the crisis.
It is certainly a confused story: Diamond's "file note" of the conversation, which he sent to the bank's then chief executive, John Varley, and copied to chief operating officer Jerry del Missier, reads as if Tucker wanted Barclays to get its Libor submissions down. But Tucker and Diamond insist this was not what was intended, while del Missier has since admitted he misunderstood. And a dump of documents alongside the report provides Varley's point of view: he says he did not discuss the matter with Diamond, although he did ring officials to insist Barclays was not in difficulty during the crisis period.
And then there are the accusations that Diamond gave "highly selective" answers when he appeared before the hearing – largely a reference to what he said when asked about regulatory concerns. Documents published on Saturday include a letter from the Bank's chairman, Marcus Agius, to the committee that appears to support Diamond. Agius tells the MPs that Diamond "had not had the benefit of seeing in advance" some of the documents on which their questions were based. But the verdict on Diamond – who insists he was candid – remains damning.
It is a sorry state of affairs and one that MPs believe is likely to be replicated in other corners of the City. Royal Bank of Scotland has already prepared the ground by warning that a fine is coming. The FSA has said that seven institutions, in addition to Barclays, are being investigated for attempting to manipulate interest rates.
But for now the spotlight is on Barclays, which, the report says, saw a "prolonged period of extremely weak internal compliance and board governance". The bank's chief executive has now gone and the chairman, Marcus Agius, will go at the end of October when Sir David Walker takes over. But Walker – highly respected and widely seen as the right man for the role – has insisted that a full-scale clearout of the boardroom will not be needed once he has found a replacement for Diamond.
Surely he is wrong. As the MPs point out, many of the bank's non-executives were in post for substantial parts of the period in question: David Booth joined in May 2007; Fulvio Conti joined in May 2006 and has been on the audit committee since September 2006; Sir Andrew Likierman joined in May 2004 and has been on the audit committee since September 2004. Sir John Sunderland, who led the search for a new chairman, joined in June 2005.
This board needs new blood – and that includes ensuring that the new chief executive comes from outside the existing management.
A reminder that life is also a precious commodity
The appalling loss of life at the Marikana mine has shocked South Africa and should remind the rest of the world that platinum and other commodities used in modern life are often produced in volatile circumstances. The particulars of the incident – in which more than 30 demonstrators were killed by police, raising memories of the apartheid-era Sharpevillecorrect massacre – are exceptional, but injuries and loss of life from mining accidents are not.
Statistics from the South African Chamber of Mines show that until 2007 more than 200 South African miners were dying a year in accidents. In 2010 the figure was 120 – 32 of those in platinum mines. Lonmin's financial report on the first half of this year highlighted problems at Marikana, saying its operations there "have been able to maintain production despite the headwinds of industrial relations, safety stoppages and community unrest".
What happened last week remains unclear. Lonmin said it "deeply regretted" the incident but insisted it was a public-order rather than an industrial-relations issue.
Clashes between police and demonstrators in which lives are lost may be unusual these days, but disputes over wages for dangerous mining jobs are not. The strikers at Marikana were asking for a pay rise to 12,500 rand a month – less than £1,000 – at a time when mining companies are grappling with falling commodity prices and looking to cut costs.
In recent days mining firms such as Rio Tinto and BHP Billiton have talked about the need to save money and slow developments to reflect a slowdown in demand from customers such as China.
In the wake of the shootings Lonmin's share price fell, but the concern was over the loss of production rather than life.
We rely on mines such as Marikana to make our lives easier: the metal plays a vital role in the catalytic converters used to purify car exhaust fumes. The problems have forced Lonmin to halt production at all its South African operations, which account for 12% of global platinum output, and that could have repercussions for the car industry.
In a boom time, commodities, often mined in struggling developing nations such as South Africa, can produce lots of jobs, plus enormous wealth for mining companies – and host governments. But they can also highlight disparities in wealth and trigger corruption, which is why people talk about the "commodity curse". That curse looks to have struck again.
Complex rail system means missed connections
Before the banking crisis, the railways functioned as a lightning rod for the economic, political and social concerns of the day. Whether it was privatisation, the closure of rural lines under Beeching, or high fares, the rail network represented more than just a means of getting from A to B.
Last week saw rail take centre stage again, thanks to confirmation of another year of inflation-busting fare increases and the award of the £5.5bn west coast rail franchise to FirstGroup, signalling the exit of Virgin Trains from the rail business. Amid the blame and counter blame from unions, Tories, Labour and passengers, one thing became clear: we have lost a collective sense of what the railway is for.
Given the current structure of the industry, that is no surprise. The Department for Transport leases the right to run privately operated trains on routes that are presided over by Network Rail, a quasi-private and state-funded company. Who oversees this? The Office of Rail Regulation monitors safety and Network Rail's finances, which include debts of £27bn underwritten by the fare payer. Oh, and fares are set by the government. Not the train operators. It's a mess.
No wonder passengers feel a total lack of empowerment. As the late, great historian Tony Judt wrote: "The railways ... are a collective project for individual benefit. They cannot exist without common accord and … common expenditure." This muddle, and lack of institutional clarity, endangers their future.