“Banks have ignored their social responsibilities since the 2008 financial crisis. At Barclays, I’m determined to change that.” writes Barclays boss, Bob Diamond (1).
Is this the same Bob Diamond, who told the Treasury select Committee that the “period of remorse and apology” for banks needs to be over and the City should be allowed to move on? (2)
Is this the same Bob Diamond who received a bonus of £6.5m for 2010 (3), and the Bob Diamond who, in spite of running the ‘tax minimization unit’ for Barclays prior to taking over as Chief Executive from John Varley, claimed not to know how many Barclays subsidiaries are offshore (although Chuka Umunna suggested it was over 300) ? (4)
Mr Diamond suggests that:
Frankly, though, banks have done a very poor job of explaining how we contribute to society. We need to fix that as part of the process of restoring trust in what we do. At the simplest level, banks are entrusted with deposits from individuals, businesses and governments. We put that money to work by, for instance, helping people to buy homes or lending to growing businesses.(1)
And yet we are constantly told by, amongst others, Vince Cable, that the banks are not lending to SMEs (small & medium size enterprises), or are charging exorbitant interest rates. Furthermore, the average age of being able to get a mortgage has now risen to 39y old.
Mr Diamond continues:
Banks also provide critical services to governments and business by providing direct access to global buyers of debt and equity and by establishing large, consistent markets of buyers and sellers. Some characterise these activities as speculative trading. They aren’t; they serve a fundamental client need, so it’s wrong when they are caricatured as gambling. (1)
AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.
The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs). (5)
And which transnational is top of the list of the top 50 of the 147 superconnected companies … Barclays plc.
But as Bob Diamond wrote to Chukka Ummuna, though Barclays had made a profit in 2009 of £11.6bn, the bank had paid just £113m to the Exchequer in corporation tax. (4)
Richard Murphy comments (6):
‘..Bob Diamond fails to make any mention of tax, or the tax havens that banks use to mitigate their liability to pay tax. The payment of tax is the single biggest indicator of social responsibility in my opinion. Diamond does not even mention it, but his bank has been shown to be a persistent avoider of tax liabilities by me and other tax analysts. It’s hard to be sure how much Barclays avoids in tax so opaque is its accounting but it’s also safe to say it is likely to run to hundreds of millions of pounds, probably a year, and over the period he reviews in his article much more than that.’
Andrew Neil on ‘This Week’ described Bob Diamond’s inaugural BBC Today Business Lecture as “weird”. Richard Murphy describes the Guardian extract “an extraordinary article”.
However, many others would use less polite language to describe Bob Diamond’s attempt to represent Barclay’s global activities as being akin to a ‘glorified Captain Mainwaring’.