New Labour came to power in 1997. One of the very earliest of its initiatives was to remove financial and regulatory control from the Governor of the Bank of England (under the guise of making the Bank 'independent') and vesting that control in the Chancellor of the Exchequer - the Financial Services Authority was merely a circuit-breaker for the Chancellor and his Treasury. I write 'his' Treasury because the Treasury rapidly became a personal power base and fiefdom buttressed by a narrative (however false) of 'deals' to divide Executive power between Prime Minister and Chancellor and, much worse, an embedded alternative government to the one we had elected.
Boasts of 'light-touch regulation' yielding the 'end of boom and bust' were a yearly budgetary feature in Parliament, and other public forums, throughout the years subsequent to this profound alteration in the UK power structures until the elected Prime Minister was driven from office by what was effectively a colpo di stato, in 2007.
That deregulating the financial system did not end but positively rocket-fuelled boom and bust is our current sad understanding. The unfolding experience and history of sub-prime lending and its subsequent repackaged onwards-sale, the pillaging of savings and pensions, the outrageous leverage levels undertaken by provincial building societies acting like financial tyros, and the corruption of banking and financial institutional behaviour generally may, or may not, be on the legal side of iffy.
Fixing Libor, money-laundering for international criminal organisations, and for outlawed sovereign states is, however, beyond the Pale. London was used as a centre for what could not be done elsewhere - either because other, off-shore centres were too small or insufficiently developed and trusted, or because appropriate but more severely regulated financial centres wanted to use a cess pit for subprime, and the laundering of gun- and people- running, drugs, and rogue-state and rogue individuals transactions and profits.
Laundering for the State of Iran is the last straw. The Telegraph reports that:
'Standard Chartered denies the allegation made by the New York state
regulator that it carried out sanctions-busting transactions on behalf
of Iranian clients totalling $250 billion over a decade.'
"Standard Chartered thinks the regulator [emphasis added, ed.] got it wrong by enforcing a view
of the rules that was “incorrect as a matter of law”. 'In effect,
Standard Chartered is saying ‘yes, we carried out these transactions,
but we think they were within the regulations’.
The bank’s statement (again quoted by the Telegraph) emphasises too:
“Standard Chartered ceased all new
business with Iranian customers in any currency over five years ago.” [emphasis added, ed.]
So, for ten years they sanctions-busted for Iran - content their behaviour was permissible under the rules extant in London - to the tune of $250 billion. Over 5 years takes us back to before August 2007. In June 2007 a new Chancellor of the Exchequer took office and a horribly old and familiar 'new' prime minister moved into No 10. The ten previous years then take us to 1997. In 1997 that same 'new' Prime Minister had moved into the Treasury, nursing the strong but inappropriate belief that he should be the prime minister.
The kinds of services that have been provided by the City of London - the UK's major industry - do not come cheap. So where are the returns? Ill-gotten returns, certainly, but if we agreed, and we did, to lift the regulation, at least let's see the money. Except what we see is PFI off-balance sheet debt: the hospitals'n'schools, the wilful expansion of state sector employment on inappropriately high wages and benefits, the whole client state, has not even been bought outright. We are in grotesque levels of debt for all of that.
There really does need to be an Inquiry into the conduct of economic and financial and regulatory policy between 1997 and 2007. This is not a banker scandal. It is a political scandal whose ramifications are being uncovered by the regulatory authorities of foreign powers. Apart from querying whether we have we no sense of shame or regret we need to clean up this ten-year disgrace ourselves because otherwise others will do it for us, and with interests as wholly foreign as are their powers.