Leading article: The day Bob Diamond outshone MPs

 

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Bob Diamond's appearance before the Treasury Select Committee had been billed as "big box office" – and, like many such keenly anticipated appearances, it fell short by quite a long way. The (just) former chief executive of Barclays alternated anger with painstaking detail and charm. After a hesitant beginning, he settled into a tone more reminiscent of breakfast television, addressing the MPs by their first names, as though it was they rather than he who needed to be put at ease.

He dropped no bombshells. He did, however, offer some useful clarification – though not on what is emerging as the most contentious question: the nature of the contacts between the Government, the Bank of England and Barclays through 2008. The first clarification related to the Libor scandal, where Mr Diamond separated the complicity of Barclays traders trying to manipulate the inter-bank lending rate for their own profit, and any attempts government ministers might have made to influence it. In so far as both call into question the integrity of Libor, though, the issue is one and the same.

The second concerned his interpretation of the 2008 conversation he had minuted with the Deputy Governor of the Bank of England. Where some saw the call as an instruction to report lower lending rates, Mr Diamond said he had seen it rather as a reflection of Government fears that Barclays' relatively high declared rates betrayed a financial position less secure than that of other banks. In fact, he said, it was Barclays' figures that were accurate.

The third clarification relates to the Government's insistence on a parliamentary inquiry. With some honourable exceptions, the MPs' questions were timid, ill-informed, over-emotional and party political. Once Mr Diamond understood the need for periodic self-flagellation, he was almost off the hook. The proceedings offered the perfect illustration of why a judicial inquiry is so necessary, and why the parliamentary option will not do.

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