Special Alert : The untouchables
The Libor scandal continues to provide fresh headline fodder five years after the Treasury Select Committee’s inquiry. This month, a secret recording – apparently of Barclays senior executive Mark Dearlove and now-jailed Libor submitter, Peter Johnson – has raised new questions over senior management’s role in rate rigging.
For financial journalists, Libor is the gift that just keeps on giving. But behind the headlines and the eye-watering fines, we mustn’t forget the individuals who have paid the biggest price of all.
Yes, the bankers found guilty of benchmark manipulation broke the law. But were they really the driving force behind this systematic and widespread misconduct, or were they simply acting on instruction?
More and more evidence is pointing towards senior executives playing a pivotal role in the manipulation of Libor rates, telling their subordinates to submit dishonest calculations to the BBA. And yet, of the 19 individuals charged by the Serious Fraud Office over Libor and Euribor, none have been from senior management.
Even the Bank of England, on which we have relied to provide oversight and to shape a more sustainable and honest culture in the financial industry since the crisis, appears to have been pressuring banks into making false submissions.
Is it fair that Peter Johnson, who – if we believe the recording is genuine – followed orders from his superior Mark Dearlove, is now serving a four-year jail sentence while Dearlove enters his 20th year at Barclays? Is it fair that for the last eight years, Stylianos Contogoulas and Ryan Reich have been fighting to clear their names; or that Tom Hayes, the so-called “ring leader”, received a jail sentence not much shorter than some people are given for murder?
It seems it’s fine to break the law, manipulate subordinates into doing the same and then push the blame onto others – just so long as you are at the top, high enough up where the long arm of the law can’t quite reach you.