Anthony Hilton: Proof in spades that a drive for bonuses undermines integrity

Any attempt to manipulate the rate has to have been a joint effort

As people must by now know in every corner of the planet, Barclays was this week fined a record amount for its involvement in attempts to manipulate the benchmark used to set interest rates for much of the western world.

But that clearly will not be the end of the matter, and indeed, RBS has now indicated that it is talking to the authorities.

Any attempt to manipulate the rate has to have been a joint effort, because the official published rate is an average derived from the inputs of several banks. In the calculation – done by Thomson Reuters on behalf of the British Bankers' Association – the most extreme numbers at the top and the bottom of the range are ignored precisely to make sure that a rogue number cannot distort the bigger picture and anything submitted by just one bank is diluted by the averaging process. Obviously the laws of mathematics mean that all the items of data which are used will have an influence on the outcome, but the effect of just one item will be muted.

However, it has been the stuff of press reports from various venues around the world for several years that several more banks have been caught up in the inquiry. As recently as early May, the Wall Street Journal identified half-a-dozen banks caught up in a Libor investigation in Canada, one of whom – not Barclays – was said to be co-operating with the authorities. There have been earlier, similar reports from Asia, and indeed London, which described traders from several rival banks getting together so that collectively there would be enough of them to shift the rate in the direction they wanted, even if they could not be sure in advance by how much.

But what is really worrying is what this says about the evolution of business culture – not just in banks but across the board. On the day when the Barclays fine was on its front page, the second page of the Financial Times carried a story about a German banking executive being jailed for four years having admitted to receiving $44m (£28.1m) in bribes from the Formula One motorsport entrepreneur Bernie Ecclestone, whom, it should be stressed, was not charged.

The same paper also carried a report about Glencore, one of the world's biggest mining and trading houses, which said it and 15 other firms had just been fined for bribing an EU official in exchange for "secret information." And on yet another page, it was reported that at the annual meeting in Tokyo of Nomura, Japan's largest securities firm, the chief executive, Kenichi Watanabe, apologised to shareholders for his firm's involvement in three insider dealing cases in Japan.

All that in one newspaper on one day. What more evidence does one need that the philosophy of shareholder value – profit above all else – has created a huge loss of understanding that business is actually about serving customers.

Too many of the incentives designed to boost profit act even more powerfully to undermine employee morality and integrity.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border