Bankers, BBC 2 9pm

This is the first of three parts. ‘Fixing the System’ focussed on the fallout from the London Interbank Offer Rate (Libor) Scandal and in particular it focussed on Bob Diamond at Barclays, an unapologetic banker’s banker. In old- fashioned times a promissory note could be exchanged for an equal amount of gold coins, money was issued by the mint. Money was something you could get your hands on. Shaving a bit off Her Majesty’s currency was liable to get you hanged or transported to Australia and most folk chose the former. Fast forward a few years whilst singing Rule Britannia and the stuffy old Bank of England was insisting that banks in the UK leave a few percentage points of their total net worth with them in case of a run on their bank. The Bank of England also set the lending rates between banks which were, of course, lower than banks lent to its customers and in that way generated profit. Just about the time Diamond came to work for the investment division of Barclay’s, the Glass-Steagall Act was repealed. What that meant in effect was banks could no longer differentiate between commercial and investment loans. Bob Diamond, for example, was posting annual profits of more than 300%. Money talks. Twelve-percent of the Exchequers revenue came from bank profits. Diamond became chairman of Barclay’s. From boom to bust money makes money and the banks cannot be allowed to fall. In free market economics the market is always right. The Bank of England no longer set the inter-bank rate. Banks did it themselves. The Bank of England was no longer concerned with a bank’s liquidity. This was valuable commercial information and the banks did it themselves. The top four and bottom four bank’s financial performances for that week were set aside and the average Libor rate was set from the remaining banks. Banks worked out how much they would charge each other for borrowing before they work out how much they charged non-bankers. But the prices of currencies, government bonds, shares follow the Libor rate. One analyst suggested up to eight times the GDP of the world economy was tied into the price of Libor. Diddums. Didn’t the banking sector start rigging the Libor market. Barclay’s and the Royal Bank of Scotland among others were caught. Well, they weren’t really. That makes a good story. The Financial Service Authority in Britain did nothing until the American Enforcement agency began to prosecute. The banks weren’t responsible. It was something called the culture of greed. In banks we trust. Bring back hanging.