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Stuck in a traffic jam in a car without air-conditioning, crawling between red lights and road works on the hottest day of the year: that is a fate which most of the public would wish on rich bankers, as an overture to their fuller punishments – but there was a consolation for me while it was happening. I tried to avoid heatstroke by listening to talk radio, and was interested to observe that it was impossible to tell the difference between Tory spokesmen and Labour ones. They were equally condemnatory. The bankers ought to be worried.

The rest of us ought to ponder. Where there has been wrong-doing, there ought to be punishment. At the very least, those responsible for manipulating Libor ought to be looking for other employment. If Chief Executives and Chairmen insist that they did not know what was happening, they should face intense scepticism and a heavy burden of proof. Is it conceivable that those in command could claim that they had no idea what was going on, without pleading guilty to idleness and negligence? If the law was broken, prosecutions should follow. Beyond that, care is needed. The banking sector is a vital part of the British economy. Without it, we would face impoverishment. Most bankers are decent and honourable. No-one resents a bent copper more fiercely than an honest copper does. I believe that the same is true of bankers.

So what went wrong? There is a simple explanation: a divergence between culture and ethics. Until the mid-1980s, the City had a distinct culture which underpinned an ethical code. Certainly, there were crooks: there always will be, when large amounts of money are sloshing around. But crookery was kept under control, by a sound system of regulation, which was informal as well as formal and based in the Bank of England. When the Governor of the Bank raised an eyebrow, dubious men quailed and bad practices ceased.


In the 1950s and 1960s, there was a wonderful character called Hilton Clarke (his grandson Ed is a friend of David Cameron's). An immensely tall man, getting on for ten feet in his customary top hat: he was the Governor's enforcer. As he strode around the City, it was as if the eyebrows had sprouted legs. He could spot a wrong 'un at two hundred yards.

In those days, that worked pretty well. Yesterday, amid some other uncharacteristically sensible comments, Ed Balls sneered at the "boys' club" attitudes of the old City (although he presumably meant "gentlemen's club", he could not bring himself to say the word). He is wrong. The old methods buttressed morals and manners more effectively than the later improvisations have. But after the Big Bang, there had to be changes. Suddenly, the City was too large, too international and too rich for eyebrow government.

So there were more rules and, indeed, laws. But there were also cultural changes, by no means all beneficial. In the later sixteenth century, a lot of west-country Englishmen turned to piracy. Tales of fat Spanish galleons, lumbering-full of gold, excited cupidity. In the Devon ports, fitting out a pirate vessel was the Elizabethan equivalent of buying a lottery ticket. Some of the ships had names such as "Why Not I?". Many owners ended up hanging in chains or blasted to the bottom of the Caribbean, but a few came home with riches which at least satisfied the dreams of avarice, and sent others, fired with emulation, Westward Ho.

Three hundred years later, after Big Bang, there was a fresh outbreak of piracy – in the City. Men who did not start out dishonest had their heads turned, their morals corrupted, by the lure of lucre. The love of easy money was the root of City evil. There seemed to be so many galleons, so easily to plunder. In the new financial world, the old distinctions between different sorts of banking – clearing, investment, merchant et al – ceased to operate. Too often, however, the merger of morals occurred at the lowest common denominator. The prudential practices from the eyebrow era were often superseded by profit at all costs.

Even so, one might have assumed that Libor would have been immune. This technical interest rate – try to borrow at it – whose existence was known to only a few thousand people will now be a household word. Its abuse will come to symbolise a culture of wrong-doing. There is a good Scots word, "scunnered". Almost onomatopoeic, it means "fed up", redoubled. A lot of people are now scunnered, and so they should be. David Cameron is one of them. His delightful father, Ian, was from the old City, steeped in its ethos, its values, its merits. That is how his son the Prime Minister was brought up; that is why he is now so angry.

But anger is not a reliable counsellor. We already have plenty of rules and laws, as Barclays has discovered. £290 million is not small change. Professionally, a lot of bankers will be punished for malfeasance. A number of promising careers have suddenly lost their promise. It would be surprising if they can all escape the criminal law.

That said, we must be careful. As I say, most bankers are honest. Britain is good at banking and banks are a vital part of the economy. There needs to be hard thinking. Where necessary, there should be new rules and laws. Yet we must remember the old adage: legislate in haste, repent at leisure. David Cameron has called for a responsibility revolution, and nothing less will do. But to work, it should also be a responsible revolution, to build a new City ethos which will endure.    

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