Breaking: Understand the consultation into Pilgrims – taxpayer funded trade union officials – will start next week.
— Harry Cole (@MrHarryCole) July 3, 2012
Downing Street are drawing attention to this email in Barclay’s evidence to tomorrow’s Treasury Select Committee:
“Mr Tucker stated the levels of calls he was receiving from Whitehall were ‘senior’ and that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently.”
As Guido said this morning, you have to distinguish between the nickle and dime LIBOR fixing scandal of traders trying to massage their end of day mark-to-market and the Treasury / FSA / Bank of England policy of fixing LIBOR. Tomorrow Bob Diamond is likely to point out that manipulation of LIBOR rates was in the national interest and sanctioned by Downing Street and the regulators.
Gordon Brown’s Downing Street economic adviser Shriti Vadera was driving the policy…
The Diamond backlash wasn’t expected until tomorrow’s Treasury Select Committee, but the first blows have been struck from an unlikely source: his daughter. Nell Diamond, a twentysomething Deutsche Bank employee, has hit back at the politicians laying into her dad. In a swiftly deleted tweet, Nell told George Osborne and Ed Miliband to “HMD“, or “hold my dick“:
The photos of Nell and Bob are still up…
UPDATE: Neo-Guido was at the same Kanye gig pictured above and returns from lunch to report Daddy Diamond and Nell are displaying the “Diamonds are Forever” sign.
Labour prude Rachel Reeves has suffered a new blow in her killjoy campaign to shut down lap dancing clubs in Leeds city centre. The Shadow Chief Secretary to the Treasury has called for premises that offer adult entertainment services to be refused licenses and be forced to move out to “less conspicuous” areas.
Guido is pleased to report that all seven lap dancing clubs in Leeds have retained their licenses as, hilariously, the online e-petition for Reeves’ campaign has mustered only three signatures as we go to pixel. The people have spoken…
Alex Salmond’s favourite columnist Joan MacAlpine MSP was off on one this morning about new union poster boy Alistair Darling. In a particularly unhinged rant, MacAlpine lambasted the former Chancellor for “being asleep at the wheel while the bankers screwed the rest of us”. That’s all very well, but poor old Joan then got slightly ahead of herself:
“Quite why he thinks he has the right to come to Scotland and lecture us about how to run our affairs is breathtaking in its arrogance.”
Perhaps because the fact that Darling is, er, Scottish…
It appears that Progress has bowed to pressure from the unions and admitted defeat in the party’s damaging civil war. The Blairite faction this morning acknowledged the grievances of the GMB and announced a raft of reforms in response to their criticism. Labour’s enemies-of-the-people will now publish unprecedented information on their sponsorship and donations. Presumably that declaration will be “it’s all from Lord Sainsbury”.
“With everyone of your predictions it goes on getting worse, I’m sorry sir you don’t have the presence, the credibility or the standing for the international markets to believe you can provide a solution. And Mr Barroso here, who stood up at the G20 and said “we don’t need any lessons on democracy”. Says the unelected president of the European Commission… You’ve made yourselves an international laughing stock. You don’t have any credibility.”
Yesterday it was the Tories advising their top donors on how to avoid tax through a controversial “legacy” scheme. The story had considerable traction and unsurprisingly provoked considerable outrage among Labour MPs:
Guido can now reveal that the Labour Party offers an almost identical scheme to help its supporters dodge inheritance tax as well. Labour’s “Leave a Legacy” programme offers advice on three different methods of leaving money to the party, even going as far as to suggest clever a legalistic wording of donors’ wills in order to minimise tax liability:
Labour have led the way on bashing tax dodgers, with everyone from the shadow cabinet to the backbenches queuing up to stick the boot in. Starting with trigger-happy tweeter Steve McCabe, Guido wonders what they have to say about their own party being directly involved in a tax avoidance scheme. They call that red-handed…
After resigning as CEO of Barclays this morning, Bob Diamond may yet exact some revenge on the government when he testifies tomorrow in front of the Treasury Select Committee.
There are two LIBOR fixing scandals – the first involves traders massaging the settling of LIBOR rates a few basis points, mere hundreths of a percent, off market reality to flatter their trading books. It appears to have been going on for years and not just at Barclays. This was not so petty corruption.
The second LIBOR fixing scandal is of a different order altogether – it involves the wholesale systematic substantial misrepresentation of true LIBOR, with the encouragement of the Treasury, the FSA and in particular the Bank of England. The policy was to under-report LIBOR rates at much lower levels than were actually trading in the market. This deliberate policy was to cover-up the increased risks to the UK banking system revealed by higher LIBOR rates.
It is emerging that Gordon Brown’s economic adviser in Downing Street, Shriti Vadera, an ex-UBS investment banker, circulated a paper on “Reducing Libor” at the height of the banking crisis, which she argued would be “a major contribution to the stability of the banking system and to the health of the economy”.
That message will have gone out to the Treasury in Whitehall, the regulators and the Bank of England. They in turn will have given a nod and a wink to the investment banks. Bob Diamond is reportedly furious that the “lowballing” of LIBOR rates by Barclays – which was explicitly encouraged by the authorities to stabilise already panicked markets – is being used against Barclays. Bob Diamond is expected to testify tomorrow that the Bank of England’s deputy governor Paul Tucker encouraged the “lowballing”.
The politicisation and manipulation of interest rates is ongoing even after Gordon Brown and Shriti Vadera are long gone. The £275 billion Quantitative Easing (QE) programme implemented by Mervyn King with George Osborne’s blessing is designed to artificially lower interest rates. We currently have a false market in Gilts, it is arguably the biggest bubble since the South Sea Bubble. It is cheating pensioners and savers of income on an unprecedented scale. This is a robbery organised from within the Bank of England …
Don’t buy a newspaper this morning – it’s already out of date with the musical chairs:
“Barclays today announces the resignation of Bob Diamond as Chief Executive and a Director of Barclays with immediate effect. Marcus Agius will become full-time Chairman and will lead the search for a new Chief Executive. Marcus will chair the Barclays Executive Committee pending the appointment of a new Chief Executive and he will be supported in discharging these responsibilities by Sir Michael Rake, Deputy Chairman.
The search for a new Chief Executive will commence immediately and will consider both internal and external candidates. The businesses will continue to be managed by the existing leadership teams.
Bob Diamond said “I joined Barclays 16 years ago because I saw an opportunity to build a world class investment banking business. Since then, I have had the privilege of working with some of the most talented, client-focused and diligent people that I have ever come across. We built world class businesses together and added our own distinctive chapter to the long and proud history of Barclays. My motivation has always been to do what I believed to be in the best interests of Barclays. No decision over that period was as hard as the one that I make now to stand down as Chief Executive. The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen.”
Diamond has nothing to lose now at tomorrow’s Treasury Select Committee appearance. He’s unlikely to go out quietly…