Don't blame Barclays alone

This is not a Barclays scandal, it's a banking scandal.

It’s always been easy to be angry with Barclays Bank. My campaigning goes back to the 1970s when Barclays were a target for the anti-apartheid movement (and rightly so). The past day has provided yet more ammunition for those who would like to single out this bank for attention, and I admit that I have been one of them since that has been what the media has demanded. And yet, we need to stand back and be calm (to misquote the famous poster).

Of course Barclays has admitted to a serious allegation. They helped rig markets. It is likely that ordinary people paid the cost of that manipulation. It is impossible that senior management did not know about this, but it is likely that they will walk away largely unscathed from the whole debacle, their bonuses apart.

It is however important to put this in context. Barclays was not alone in rigging this market. Indeed, they could not have done it alone. This failure was not, therefore, a failure of a particular bank. It was a failure of the banking system.

It is also very clear now that regulators knew about this failure by 2006, at least, and yet it has taken until 2012 for the first penalty to be imposed. There has, therefore, been a failure of the regulatory system as well, and a systemic one at that. The question is not therefore whether Bob Diamond should go (he should, very obviously) or whether Barclays  and other should be prosecuted (as seems possible to me under section 4 of the Fraud Act 2006); the real question should be what causes systemic failure, and what can we do about it. The answer to that question is to first of all change regulation and secondly to change the nature of banking.  In both cases the reason for change is a simple one, which is that the existing models of both banking and regulation are based on false hypotheses.

As Lord Turner reported in his 2009 report on the financial crash, regulation at the Financial Services Authority was based on the assumption that the efficient market hypothesis held true (page 39, here) He realised then that this was not true. Perhaps most importantly, two assumptions the FSA made, which were that market prices are good indicators of rationally evaluated economic value and that market discipline can be used as an effective tool in constraining harmful risk taking can now be seen to be not just wrong, but that they were fundamentally flouted  by banks rigging prices and manipulating markets to mitigate their risk at cost to others.

No wonder we had a crash: regulation assumed a bunch of innocent price taking banks all subservient to the market when nothing could have been further from the truth. It’s an unfortunate fact that regulation will have to be rebuilt on the basis that markets can’t be trusted and regulatory intervention will have to be the norm, not the exception. The era of "light touch regulation" has to be over.

That has implications for the structure of banking too. The assumption that they can be trusted is also implicit in the Vickers recommendations. Their suggestion that banks can be split under common ownership is dependent upon the belief that Chinese walls will be respected. It’s now clear that banks do not respect rules. More than that, manipulation between departments who were not meant to talk to each other was clearly commonplace at Barclays, and presumably elsewhere. On that basis Vickers has now to be consigned to history: the only way forward is to break banks up with high street and investment banking operations separated, for good.

So far we’ve wasted four years since the crash doing nothing to address the problems in our banking system. If this latest Barclays debacle does anything it suggests that the time for prevarication is over.

Barclays chief executive Bob Diamond has resisted calls for his resignation. Photograph: Getty Images.

Richard Murphy is an adviser to the Tax Justice Network and the TUC on taxation and economic issues. He is also the director of Tax Research LLP.

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The joy of only winning once: why England should be proud of 1966

We feel the glory of that triumphant moment, 50 years ago, all the more because of all the other occasions when we have failed to win.

There’s a phrase in football that I really hate. It used to be “Thirty years of hurt”. Each time the England team crashes out of a major tournament it gets regurgitated with extra years added. Rather predictably, when England lost to Iceland in Euro 2016, it became “Fifty years of hurt”. We’ve never won the European Championship and in 17 attempts to win the World Cup we have only won once. I’m going to tell you why that’s a record to cherish.

I was seven in 1966. Our telly was broken so I had to watch the World Cup final with a neighbour. I sat squeezed on my friend Colin’s settee as his dad cheered on England with phrases like “Sock it to them Bobby”, as old fashioned now as a football rattle. When England took the lead for the second time I remember thinking, what will it feel like, when we English are actually Champions of the World. Not long after I knew. It felt good.

Wembley Stadium, 30 July 1966, was our only ever World Cup win. But let’s imagine what it would be like if, as with our rivals, we’d won it many times? Brazil have been World Champions on five occasions, Germany four, and Italy four. Most England fans would be “over the moon” if they could boast a similarly glorious record. They’re wrong. I believe it’s wonderful that we’ve only triumphed once. We all share that one single powerful memory. Sometimes in life less is definitely more.

Something extraordinary has happened. Few of us are even old enough to remember, but somehow, we all know everything that happened that day. Even if you care little about the beautiful game, I’m going to bet that you can recall as many as five iconic moments from 50 years ago. You will have clearly in your mind the BBC commentator Kenneth Wolstenholme’s famous lines, as Geoff Hurst tore down the pitch to score his hat-trick: “Some people are on the pitch. They think it’s all over. It is now”. And it was. 4 - 2 to England against West Germany. Thirty minutes earlier the Germans had equalised in the dying moments of the second half to take the game to extra time.

More drama we all share: Geoff Hurst’s second goal. Or the goal that wasn’t, as technology has since, I think, conclusively proved. The shot that crashed off the cross bar and did or didn’t cross the line. Of course, even if you weren’t alive at the time, you will know that the linesman, one Tofiq Bakhramov, from Azerbaijan (often incorrectly referred to as “Russian”) could speak not a word of English, signalled it as a goal.

Then there’s the England Captain, the oh-so-young and handsome Bobby Moore. The very embodiment of the era. You can picture him now wiping his muddy hands on his white shorts before he shakes hands with a youthful Queen Elizabeth. Later you see him lifted aloft by his team mates holding the small golden Jules Rimet trophy.

How incredible, how simply marvellous that as a nation we share such golden memories. How sad for the Brazilians and Germans. Their more numerous triumphs are dissipated through the generations. In those countries each generation will remember each victory but not with the intensity with which we English still celebrate 1966. It’s as if sex was best the first time. The first cut is the deepest.

On Colin’s dad’s TV the pictures were black and white and so were the flags. Recently I looked at the full colour Pathe newsreel of the game. It’s the red, white and blue of the Union Jack that dominates. The red cross of Saint George didn’t really come into prominence until the Nineties. The left don’t like flags much, unless they’re “deepest red”. Certainly not the Union Flag. It smacks of imperialism perhaps. In 1966 we didn’t seem to know if we were English or British. Maybe there was, and still is, something admirable and casual about not knowing who we are or what is our proper flag. 

Twelve years later I’m in Cuba at the “World Festival of Youth” – the only occasion I’ve represented my country. It was my chance to march into a stadium under my nation’s flag. Sadly, it never happened as my fellow delegates argued for hours over what, if any, flag we British should walk behind. The delegation leaders – you will have heard of them now, but they were young and unknown then – Peter Mandelson, Trevor Phillips and Charles Clarke, had to find a way out of this impasse. In the end, each delegation walked into the stadium behind their flag, except the British. Poor Mandelson stood alone for hours holding Union Jack, sweltering in the tropical sun. No other country seemed to have a problem with their flag. I guess theirs speak of revolution; ours of colonialism.

On Saturday 30 July BBC Radio 2 will commemorate the 50th anniversary of the 1966 World Cup Final, live from Wembley Arena. Such a celebration is only possible because on 16 occasions we failed to win that trophy. Let’s banish this idea of “Fifty years of hurt” once and for all and embrace the joy of only winning once.

Phil Jones edits the Jeremy Vine Show on BBC Radio 2. On Saturday 30 July the station celebrates the 50th anniversary of the 1966 World Cup Final live from Wembley Arena, telling the story of football’s most famous match, minute by minuteTickets are available from: www.wc66.org