Government orders independent review of inter-banking lending rate abuses
By Harry Phibbs
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While the Labour leader Ed Miliband has called for a Leveson-style lengthy and large-scale public inquiry into the banking industry the Government have opted for something quicker and more focused.
An independent review is being held of Libor inter-bank lending rate following Barclays being fined £290m for manipulating the system. The review will consider the future of Libor which is the daily rate set by the British Bankers' Association. The review will be established next week and report by the end of summer.
Dealing with the matter in this expeditious manner gives the chance for amendments to be made to Financial Services Bill which is currently going through Parliament. This means that criminal sanctions rather than just fines can be brought in.
"What the public wants to see is a government that's prepared to take action to resolve these problems and get on with it as a matter of urgency."
In a Fabian Society speech Mr Miliband criticises the "double standards" of shoplifters being sent to prison while bankers are able to get away with fraud. Good point. It will also be easy (however unfairly) for him to use the recent revelations of fraud to fuel his wider attack on free enterprise.
However Mr Miliband has some difficulties with his approach. Firstly that the manipulation took place under a Labour Government which swamped the industry in ineffective red tape yet failed to provide criminal sanctions this type of behaviour. Secondly, that the Coalition Government's approach is to get on with things, so that confidence can be restored, while his approach is to delay. Thirdly, that the Leveson inquiry is proving a farcical, lengthy and expensive talking shop and thus does not offer an encouraging precedent that one on the more complicated subject of banking would be any more worthwhile.