Belfast Telegraph

Monday 1 September 2014

As P45s are handed in, is Hester's number up?

It doesn't rain, but it pours. Such a phrase has been apt both for the weather over the last few weeks and for the banking sector which seems to have developed more holes than a Dutch cheese.

News that Bob Diamond has stepped down from his post at the helm of Barclays has hardly come as a surprise, more the culmination of an inevitable tense build-up.

Stock markets certainly welcomed the news, rallying nearly 2% in the immediate aftermath in what must seem like a kick in the teeth for the man who had been championed as one of the best bankers in the world only a matter of weeks ago.

Perhaps the accompanying resignation of the Barclays chairman and chief operating officer was more surprising, although the former had the pipe and slippers ripped from his grasp late yesterday and will come back in to the fold to find a successor for Mr Diamond.

The latter's departure is sure to raise suspicions over the extent to which senior executives in the bank knew about the attempts to manipulate the rate at which banks lend to each other.

The emails and text messages which have been exposed so far in the investigation have revealed that traders at Barclays Capital, one of the most successful investment and trading arms in the City, were leaning on their colleagues to 'talk their book'.

But it's not clear whether their actions were the result of a diktat from further up the chain of command or an action taken off the traders' own bat.

The resignations suggest the top men are taking responsibility and even if they claim to have known nothing of the rate-fixing practice, they are at least responsible for the culture in Barclays Capital, one which was said to have been responsible for the unit's phenomenal success over the years but which may have prompted some to push the boundaries of legality.

With Mr Diamond handing in his P45, there will inevitably be calls for the chief executive of RBS to do the same following the IT glitch which has now impacted Ulster Bank customers.

If Stephen Hester does resign once the dust has settled on the transaction backlog, which is beginning to wear on even the most patient temperaments, it will be for different reasons than Mr Diamond.

Rather than illegality, Mr Hester is now having to deal with a technical issue which doesn't involve deceit or manipulation. At least that's the case for now but the situation may change as the financial watchdogs complete their investigations into LIBOR setting.

Instead, RBS shareholders will have to decide whether more could have been done to predict and prevent such an IT glitch which is having such a deep impact to both customers and non customers in Northern Ireland.

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