The first of many? Libor verdict is welcome, but others have a case to answer

Tom Hayes has become the first banker to be convicted by a jury and jailed for one of the scandals that emerged from the detritus of the financial crisis. That will be seen in many quarters as a cause for celebration – none more than the Serious Fraud Office, the very future of which was arguably at stake when it launched its prosecution of a man portrayed as the kingpin behind a global conspiracy to defraud through manipulation of Libor interest rates.

Politicians will point to the case as evidence that the system works. They, and the banking industry, will be pleased that the public has a fall guy, and will hope that represents the start of a curtain being drawn on past sins. That would be a mistake.

What became a show trial for a generation of miscreant bankers raises many more issues than it puts to bed. The kernel of Hayes’s argument against conviction wasn’t that he was only following orders – the Nuremberg defence – it was that he was only doing what everyone else was doing and was quite open about it, even to the extent of posting on Facebook. The jury disagreed; what mattered was whether Hayes had been dishonest by the standards of reasonable, honest members of society. That being the case, how should we judge his managers; those who, far from reprimanding him, rewarded him?

Some may argue that they did not know. Then why did they not ask? Why did Hayes’s behaviour raise not a single flag until so late in the day? As Hayes contemplates a bleak future, many of them will be comfortably retired. Others will still be working. Meanwhile the SFO has expressed concerns that games are still being played with interest rates just days after the Financial Conduct Authority attacked the industry’s sluggishness in putting its house in order. Any celebration must be put on hold. Too many questions remain unanswered.