bankster fat cat food with its fable on the label

I loved the Economist cover this week

A few of us were in a wine bar in Central London when we first heard about the Barclays fine levied because they'd been tinkering with bank rates. It's one of those times when the mainly American word 'leverage' springs to mind. In this case a tiny adjustment that generates millions of dollars.

I couldn't help saying to my fellow sparkling water drinkers that the £290m fine was a mere drop in the ocean compared with the effects of the rate manipulation. Although, like the Higgs boson, most of us don't really understand how it all works unless its described in comic sans.

In the first stage the small tweaks to the rates seemed to support trader personal gains creating Bollinger magnum sized bonuses. The advantage to Barclays would have been tens of millions per day.

It all appears to have run for well over ten years. Such accumulation starts to make the £290m fine seem rather small.

Then the strangest thing, after years of these shenanigans, the generally high Barclay rate suddenly dropped into general alignment with everyone else.

It seems to be at around the time that UK Government was grappling with what to do with errant banks teetering on collapse. We saw other UK banks pressed into takeovers of one another and some getting bailed out by large injections of UK taxpayer money.

This bank escaped those fates, but maybe perhaps conveniently so at a time when the sheer affordability of all the other bail outs must have been a question for the Exchequer.

I wonder if we'll ever know? Even if we ask the man in charge of the bank.

It must be tough for him at the top, on his £20 million per annum package and now to get a further £16 million payoff. That's around 1/8 of the equivalent of the total fine the bank paid. Who needs lotteries?

And he knows nothing about any of it. Until just a few days ago. Top man.

I find it inconceivable that a fairly wide group of people wouldn't have known about this in the chatty Big Bang deregulated City.

I'm similarly bemused that the Financial Services Authority can be based a ten minute walk from the Capital Markets floors where this would have been operating, yet only flagged any of this a short time ago - just ahead of the FSA's own impending disbanding.

Maybe there is an invisible force field around the financial system that no one can see and that can only be broken in very special conditions?

It certainly feels like a very dark matter.

close to the wind

Two years ago, one of the well known British Bank's shares were valued at around six quid. Today, Monday, they are worth 11.6p. One fiftieth.

The recent £20 billion of state aid wasn't enough to prevent an estimated £28 billion loss. Their purchase of a foreign bank soaked in sub-prime lending last year didn't help.

And now short selling is allowed again and other banks are taking on further water as playful dealers bet their bonuses on the degree of nationalisation of the banking sector.

Well, it seems we all like a flutter, so now our taxpayers' money is again being used to support the reckless financiers who have sailed their savers' money into every available rock. Despite Gordon's apparent anger at the recent run of events, there still don't seem to be many top cats being truly held to account over their steering of these badly trimmed vessels.

And whose watch is this on? He, too, should be called to account.