Britain's Treasury published a 121-page report on the Libor rate-setting scandal today, and few were spared: Barclays was severly browbeaten for its "deeply flawed" culture, with parliamentarians calling the $453 million fine it was ordered to pay a "reputational disaster," while the Bank of England was put on notice for spectacularly failing to notice the obvious number-massaging. But it was former Barclays CEO Bob Diamond who came in for the report's most savage criticism:
Select committees are entitled to expect candour and frankness from witnesses before them. Mr Diamond's evidence, at times highly selective, fell well short of the standard that parliament expects, particularly from such an experienced and senior witness.
In addition to what the report described as his "inconceivable" recollection of events, what most annoyed regulators about Diamond's July 4 hearing was his penchant for blaming everyone but himself, and refusing to acknowledge that the Financial Services Authority had expressed its Libor concerns to Barclays months earlier.
But Diamond isn't taking this ribbing lying down. In a statement provided to The Telegraph, he said, "I answered every question that was put to me truthfully, candidly and based on information available to me. I categorically refute any suggestion to the contrary."
What's especially clear from today's developments is that the Libor mess is a far ways from settled. Across the Atlantic, British authorities are still probing at least three major banks, including HSBC and the Royal Bank of Scotland, while just this past week American banking giants JPMorgan Chase and Citigroup were both served subpoenas by the New York and Connecticut attorneys general. So, don't be surprised to see a few more executive heads roll — or a few more multimillion-dollar fines. But also don't be too surprised if, as the FSA's Matt Wheatley (and Intel Kevin) argue, we keep the current Libor system more or less as is, minus perhaps a few needed tweaks.