Deeper Libor trouble

The more we learn about the Libor scandal, the more serious it becomes. Robert Peston’s suggestion that during the financial crisis, Barclays traders thought they were manipulating Libor under instruction from the Bank of England takes matters to another level.
 
It should be stressed that the Bank is indicating that it offered no such instruction. But the fact that Barclays traders, at least at one point, believed their behaviour was sanctioned does show that these abuses were not simply the work of a few bad apples.
 
Politically, the parties are battling to show which is best placed to drain the financial swamp. As I say in the Mail on Sunday, those close to Ed Miliband feel that this could be a defining moment for him. Miliband has already called for Diamond to go and for a public inquiry into the banking industry. He is now, I understand, considering pushing for the total separation of investment and retail banking; Vickers Plus as Labour sources call it.