When we hear about bad behaviour from our banks, like the Barclays interest rate rigging scandal, the first question we tend to ask ourselves is what has it got to do with me?
The dishonesty that Barclays displayed in not disclosing the interest it was quoting to the market place on what it was prepared to pay to accept deposits and offer loans seems a million miles from day to day life.
Their actions affect the motorist struggling to afford to put petrol in the car and the people in rural Wales who are off the mains gas grid to heat their homes.
If we talk about commodity markets we rarely think that bankers are betting on commodities like oil and sugar; what they do affects what we pay at the till or the pump.
Barclays is just one of a small group of banks that have been helping pension funds hoard basic goods such as these to the order of hundreds of billions of pounds. America has taken steps to regulate this, and I am worried that the banks have shifted this practice to the London markets.
Earlier this year, I proposed ‘The Banking Disclosure and Responsibility Bill’ to give our regulators power to shine a light on the transactions and activities of banks. This was born out of belief that I have had since I worked in the financial services industry that there is a lack of information about what was going on in the London financial markets.
As a result I began a campaign for transparency not just in LIBOR market that Barclays was manipulating, but prices across all markets.
My proposals would have seen every transaction carried out by major banks recorded, allowing us to foresee this scandal as well as highlighting other risks. Unfortunately, despite proposed amendments to the Financial Services Bill, and my own attempt to introduce legislation, the government has been damned by its inaction.
If we are to learn anything from this scandal it is that serious reform of our banking sector has to take place in order to change the culture of our financial industry. Market manipulation is a criminal offence and I want to see a full criminal investigation of what happened, not just in the LIBOR market, but across all the London markets before the crash.
The British Banker’s Association said nothing to the regulator, however it is now telling us that this price fixing had no effect on people like you and me – this is just nonsense. We have waited five years for the industry to come clean, our patience has run out.
The cost of the lack of trust in our banks is affecting credit and shrinking our economy. We now need a commission to investigate what has gone on in our financial markets.
The financial crash was the biggest economic crime of the past 70 years but there still has not been a single conviction for that crime. After Barclays people will be fed up with wondering what has gone wrong. That is why there has to be a full investigation with full judicial powers
Christopher Evans is the Labour & Co-operative MP for Islwyn