“To encourage the others . . .”

# 48

   It is a recurring delight to discover how vaguely known are the words to our national anthem, ‘God Save the Queen’. Millions will have enjoyed the familiar sight of England footballers struggling to mouth the lyrics shortly before their exit from the Euro 2012 championships. And there is always a temptation for interviewers to ambush ardent patriots and monarchists with a request to recite the second, or any subsequent, verse. For those needing a reminder; the second verse calls for the scattering of her enemies, ‘Confound their politics, Frustrate their knavish tricks, On Thee our hopes we fix, Oh save us all…’  And the third begins ‘Thy choicest gifts in store, On her be pleased to pour…blah, blah di blah.

   These words and that tune were first combined in the middle of the eighteenth century when the continued occupation of the throne by the ample, Hanoverian, buttocks of King George II seemed less than certain. The anthem, first performed at the Drury Lane and Covent Garden theatres in September 1745, was concocted to stiffen the resolve of Londoners against the Jacobite horde then pillaging its way, unchecked, southwards from Scotland.[1]

Confound their politics

   Two hundred and sixty seven years later, in this year of her Diamond Jubilee, HM Queen Elizabeth II enjoys one ‘happy and glorious’ attribute that sets her apart from the rest of the British Establishment – she alone is actually popular amongst the people. All the other traditional components of our governing elite – politicians, financiers and industrialists , senior civil servants, military brass, press barons,  judges and lawyers, chief constables,  top doctors, professors, bishops (need I go on?)… are regarded by large swathes of the population with indifference, disdain, contempt or – should they ever have the temerity to appeal for a more willing acceptance of greater austerity - outright, possibly violent, hostility.

                                                                                                                          

   This week, the pendulous bucket of public contempt has been emptying its stinking ordure over banks and bankers alike. No more of that dim, bespectacled, boring but respectable Captain Mainwaring[2] managing your bank. The real ‘diamond’ of this jubilee year – Bob Diamond – has emerged from an impressively disreputable field to achieve top (or should that be bottom?) ranking in the opprobrium stakes. Bob’s score may even undercut the record depths plumbed so recently by the late ‘Sir’ Fred the Shred Goodwin. But Bob-the-Banker could not even bring himself to resign properly. To do that might have involved an admission of some fault or culpability on his part. Instead, he announced he was “stepping down” because external pressures on Barclays risk “damaging the franchise – I cannot let that happen.” In a typically sharp, tactical, move Diamond quit because he was being targeted for blame, not because he had presided over a major fraud.

Frustrate their knavish tricks

   On 27 June, Barclays Bank was fined £290 million by US and UK regulators for fraudulent manipulation of the LIBOR and EURIBOR interest rates. Appearing before the Treasury select committee yesterday[3] , Bob stoically adopted the strategy of the Three Wise Monkeys. He had seen no evil. He had heard no evil. He could speak no evil. By the end of his evidence you might have wondered what he’d been doing, day after day, in his £20 million job as Chief Executive. No one below Bob at Barclays seems to have known that fraudulent manipulation was wrong or even that they should inform their boss about it – except, that is, for the ‘reprehensible’ fourteen who knew it was wrong but, plainly, didn’t give a sh*t. And then there was Bob’s deputy, Jerry the Chief OO, who probably knew it was wrong but thought (thanks to Bob?) that it had been sanctioned by a deputy-governor of the Bank of England and therefore wasn’t quite so wrong as it might have been… and certainly not wrong enough for him to check with Bob that Bob knew it was wrong and knew it was going on …. Give me strength.

   This was not a victimless crime. Individually and corporately, banks and bankers, made millions from this scam and the money came from someone, somewhere[4]. In the engine-room of the big rip-off are the traders in financial instruments. They receive huge bonus pay-outs[5] if they gamble successfully using other people’s money. And there is no down-side; they don’t lose their shirts if the gamble doesn’t pay off. Oh no, the bank pays, the shareholders pay…we all pay. Yet again, the essential felony at the heart of capitalism is exposed to the view of all who pretend it either isn’t there or doesn’t matter. Even its apologists have to admit that capitalism is a system based upon greed and therefore only likely to be truly regulated by fear. The select committee talked to Bob about the need for there to be a criminal prosecution of a banker, sometime soon. It was suggested that the fear of going to prison might be the only way to deter further reckless behaviour and/or wrong-doing... Time to haul ourselves back to the middle of the eighteenth century and another of George II’s battles for survival.

On Thee our hopes we fix

   In the year 1756, a loyal servant of the Crown, Admiral John Byng, was despatched with a small, under-manned, fleet to lift the French siege of the British garrison holding the port of Mahon on the Mediterranean island of Minorca. Byng was not an enemy of his king or country but was about to be treated as if he were. Byng failed to get his fighting ships correctly aligned to exchange broadsides with the French and – mindful that another officer had previously been punished for going into battle with some of his ships out of line – Byng broke off the engagement and eventually returned his damaged fleet to Gibraltar. For this he faced a court martial, charged with “failing to do his utmost’ under the 12^th Article of War; an Article which carried a mandatory death sentence. The court found him guilty but pleaded for clemency on the grounds that Byng was really only guilty of an error of judgement. King George would have none of it and Byng was duly executed by a firing squad of six marines aboard HMS Monarch in Portsmouth harbour on 14^th. March 1757. Thereafter, officers in the Royal Navy knew that although there was always a risk of failure in battle, not to risk battle would certainly be punished – and the punishment would likely be capital.

   Allowing Bob the Banker to wriggle out from under just by “stepping down” and to abscond with an obscene gratuity, underlines the weakness of any supposed accountability in the present regulatory system. In 1757, their Lordships of the Admiralty were seeking a system of self-regulation by which they could effectively control both the motivation and integrity of remote subordinates. It could take months to exchange messages with an Admiral at sea and London needed assurance that Byng’s successors would regulate their own behaviour within prescribed limits. The regulators of international banks need to instil an equivalent level of fear if they are to restrict the greed of the market manipulators. As Bob himself told us only yesterday, in banking “The culture is how people behave when there’s no one watching.”

Oh, save us all!

   In Voltaire’s satirical novel Candide, our hero and his travelling companion Martin (a pessimist) are returning to Europe from Surinam via Portsmouth when they witness Byng’s execution. Martin explains to the astonished Candide that the British execute an Admiral of the Fleet from time to time “pour l’encouragement des autres.” By making serious examples of a good few previously arrogant and unapologetic Admirals of Banking, the authorities could set a precedent which might truly ‘encourage the others’.

Blah, blah di blah.

  

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[1] On that occasion the Jacobites only staggered as far south as Derby before turning back. Rarely heard since 1745, Verse 6 of the National Anthem still summons us to support Marshal Wade:

May he sedition hush

And like a torrent rush,

Rebellious Scots to crush.

God save the King!

[2] George Mainwaring (55), Branch Manager, Martin’s Bank, Walmington-on-Sea, circa 1940.

[3] House of Commons, Wednesday 4 July 2012 .

[4] For ‘someone, somewhere’ read ‘British, European and American taxpayers’ who either own or have bailed-out failing banks.

[5] Laughably, they call their remuneration ‘compensation’ as if it’s given to make amends for some loss or personal injury they have sustained. What does that tell you?