FSA Investigation into LIBOR

Lord Empey Excerpts

Thursday 28th June 2012 Lords Chamber

[Lord Sassoon]

My Lords, on the noble Lord’s first point, I am sure that the board of the bank in question will listen to his views on bonus matters. That is principally a matter for the board of Barclays Bank to consider.

The noble Lord, Lord McAvoy, has said that we should not get too far into prior history here. There is a risk that I will get drawn into these matters. It was Mr Gordon Brown and Mr Ed Balls who espoused very explicitly the virtues of light-touch regulation, and that was the environment in which these traders operated.

[Lord Empey]

My Lords, LIBOR rates could not have been interfered with by one institution alone. There would have to be accomplices. I therefore presume that that is one of the directions in which the investigation will go.

Is the time ever going to come again in this country when someone takes professional responsibility for what is going on, leaving aside the criminal activities that will be pursued by the regulatory authorities? Is no one going to take professional responsibility and suffer a professional sanction if they are found in default?

Finally, sadly, we as taxpayers own substantial numbers of banks. Can the Minister assure the House that there is no such activity in institutions that are owned or partly owned by the taxpayer?

[Lord Sassoon]

My Lords, on the first point made by the noble Lord, Lord Empey, as I have said, other banks are being looked at by the relevant supervisory authorities here and in other countries. All that is ongoing. I very much endorse what the noble Lord has to say about the profession taking responsibility. If the banking industry wants to be thought of as a profession, clearly it should think about how it re-establishes professional standards. I speak as a chairman of the ifs School of Finance, the former Institute of Bankers, so I feel very strongly about that and believe that the profession needs to think about it very clearly.

I am not aware of public authorities being involved. I can be pretty clear that no public body is involved in any way in the LIBOR-setting regime and therefore in what we are discussing this afternoon.