The ex-Barclays boss is being used to divert attention from the real problem: the relationship between finance and politics, argues Vanessa Baird.
Outraged British MPs are grilling disgraced Barclay’s banker Bob Diamond on the Libor rate-rigging scandal. For his part, Diamond has been suggesting that senior figures in Whitehall gave him a nod and a wink to lie about what it was costing the bank to borrow money.
But what neither bankers nor MPs want to talk about is the true extent to which banks like Barclays have got entangled with the major political parties.
The finance lobby is the richest and most powerful in the world. In 2010, the year of the election that brought the Conservative-Liberal coalition to power, the Conservative party got 50 per cent of its funding from the finance sector.
Now MPs are talking tough about ‘speeding up’ the weak bank reforms recommended by the Vickers inquiry to separate retail and investment banking.
This had been slated for 2019 – allowing plenty of time for the lobbyists to get them kicked into the long grass. Well, let’s see. The ire and splutter coming from parliamentarians on both sides needs to be taken with a bonus-sized pinch of salt.
Currently, Diamond is a useful figure, a personification of greed and all that’s wrong with banking. He’s also, conveniently, an American. Chances are there will more scope for outrage when he gets away with a golden parachute.
But he’s a distraction. What we really need to worry about is the system itself – including the system of corporate lobbying and funding of political parties, which is especially opaque in Britain.
Judging by their pitiful performance since the crash, legislators and the financial services authority cannot be trusted to bring the big banks to heel and break their stranglehold over the economy.
Whether judges can do any better will remain to be seen if anything comes of the call for the judicial review, backed, to his credit, by Labour opposition leader Ed Miliband.
It may be that citizens’ or cities’ actions against the banks – such as the city of Baltimore’s claim against Barclays – can help trip up these corporate titans.
But for real change we need to demand and fight for radical measures to create a fair economy and not be fobbed off with the gleeful waving of a high-profile scalp here and there.
Photo of Bob Diamond by the World Economic Forum under a CC Licence.
The March issue of New Internationalist, Game Over! Time for a fair economy, is on the world’s unstable and unequal financial system and what alternatives are possible. Get your copy here.