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By Yves Smith.

As much as I would have liked to have seen the Bob Diamond testimony before Parliament yesterday (a previously booked flight ruled that out), I should probably consider myself lucky. Comments by readers and tooth-gnashing reports from the British press indicate that Diamond is an apt student of the well honed CEO practice of shirking responsibility and shameless denials. Those strategies go a long way in stymieing efforts to get insight, at least in the setting of a legislative grilling. Some of it is the time constraints on each interviewer: they can only go so long before they have to turn the mike over to a colleague. I’d love to see a real prosecutor, with the luxury of time and the ability to do serious discovery before deposing executives, go after some of these fearless leaders.

The most theatrical moment of the day appears to have been when MP John Mann went full bore into Diamond. I’m expecting this bit to make YouTube, but this live blog account from Scotsman gives a decent feel (Guardian’s live blog interspersed tweets from other journos, which gave multi-dimensioned coverage, similar to having multiple talking heads at a sporting event):

The internal inconsistency was there for all to see: I Bob Diamond fully deserve my lofty pay. No, there was no problem here, Barclays has a great culture. That Libor problem? Oh, it was only 14 traders and their “immediate supervisor” (don’t you love that expression? It conjures up an image of a store or factory floor boss, the sort of guy in short sleeves who wanders around to keep everyone on their toes, as opposed to the sort it probably was, a managing director pulling down at a few million quid). Oh yeah, and the compliance guys missed it too.

We have the prima facie evidence of the actual rottenness in Barclay’s culture in the very person of Bob Diamond. Fish rot from the head. Diamond has clearly, deeply internalized the “heads I win, tails you lose” finance view of the world. Barclays not only took advantage of special facilities during the crisis and continued super low rates now, it also enjoys a “too big to fail” funding advantage. Yet Diamond has been one of the most flagrant in showing contempt for the broader public to whom he owes his lofty pay. As we wrote in “Barclays’ Bob Diamond to Non-Bankers: Drop Dead” in January last year:

Yves here. This is priceless. Diamond wants the “issue”, meaning the controversy, over bonuses to go away. I’d love to see the “severe consequences to the business” of forcing lower pay on incumbents. Yes, a very few might find be able to raise money from investors. But as John Whitehead, a former co-chairman of Goldman said in 2006 when hectoring Lloyd Blankfein over the firm’s “shocking” pay levels, the firms could afford to lose them. But Whitehead missed the dynamic of the post-partnership era. The partners had every reason to keep pay in line; it was their capital at risk, after all, and overcompensating staff reduced their take. Now the top brass is aligned with the interest of the producers in taking as much from any source they can.

Back to the Financial Times:

Yves here. If you believe that, I have a bridge I’d like to sell you

Fast forward to Diamond’s Parliament star turn. So his past statements have made clear that he is pretty deficient in any sense of responsibility and he confirmed it again today, with his sadly not unusual view that CEO, like finance people generally, get the benefits of all good things, like bull markets, rising leverage levels, and dumb luck, but never never have to be responsible for failures in oversight, save saying they are sorry (remember, not only has dog-in-the-manger Diamond made it abundantly clear he is not giving up his pay, he’s apparently seen as likely to land a new job pronto. Nothing like failing up, or at worst sideways).

And the MPs managed to dent Diamond’s efforts to defend Barclay’s culture. An exchange with Teresa Pearce, per the Guardian:

Andrew Tyrie pointed out that the FSA had raised red flags about Barclay’s culture four months ago, which left Diamond on the back foot, claiming that the FSA approved of the “tone at the top.”

John Gapper of the Financial Times focuses on an issue that this blog and others have raised, that what is really at issue here is that the predatory values of traders now pervade the industry, leading incumbents to defend them as normal and necessary. This leads inevitably to “the devil (the competition) made me do it” defense:

Diamond claimed he’d found out about “the full extent” of the Libor bid rigging only a month ago, and he also said the bank spent £100 million investigating it. Huh? The FT had been writing about this issue since 2007. This says that Barclays refused to do a decent job of internal reviews and that (presumably) Diamond found out how bad things were only via his costly external assessment. a month ago. It points to either a considerable shortfall of internal controls or a deliberate management policy of “we know about this but we’ll pretend we don’t,” meaning key parties were careful not to commit incriminating information to e-mail or other written form. Neither reflects well on Diamond.

Diamond’s disconnectedness, whether genuine or clever posturing, sounds like the view from Versailles, circa 1780. As Andrew Sparrow of the Guardian observed,

Disraeli was talking about the rich and the poor. But he might have been talking about bankers and non-bankers.

There was a brief period, from October 2008 to (roughly) February 2009 when top bankers were frightened and humble. Unfortunately, it will likely take a crisis of the scale just past to engender some humility. And if the public and regulators do not get the will, soon, to curtail their looting, they are likely to engender a meltdown sooner rather than later.