Ex-Barclays chief executive Bob Diamond is up in front of the Treasury Select Committee this afternoon. I, for one, can't wait to hear what he's got to say for himself.
It's good that Mr Diamond resigned yesterday, because now he has no reason to hold back.
The banks have been naughty boys, yes. But it beggars belief that the authorities were completely unaware that Liborwas being manipulated during the grim days of 2008.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Worrying about that probably wasn't at the top of their list of priorities, given that half of the British banking sector was on the verge of nationalisation at the time.
But I'll bet you they're worrying about it now.
The whole financial system is flawed
The most interesting thing about this Libor business is the reaction to it. As I noted in Thursday's Money Morning:Barclays' interest-rate rigging scandal -yet another reason to sell banks, in practical terms, this probably hasn't affected the average man in the street directly.
But the angry reaction suggests that this is pretty much the straw that has broken the camel's back. People are finally getting a proper look at how our financial system works, and they're not very happy about what they're finding out.
That's why I think this discussion with Bob Diamond could be so interesting this afternoon.
Barclays hasn't been operating in a vacuum. Other big banks have been involved in this too. As for what happened in 2008: remember that banks were imploding all over the place. Even if it knew nothing about the banks' activities, the Bank of England certainly wouldn't have been unhappy to see relatively low Libor rates.
After all, a high Libor rate was a sign of distress. With individual banks being picked off left, right and centre, the last thing the authorities wanted was for it to become clear that one of the big ones was being charged more than the rest.
So people are right to be angry at the banks. They've taken our money and shown a real lack of humility or understanding in return. But it's important to understand that they were allowed to operate in this way by a system that was also extremely flawed.
At the end of the day, it's the Bank of England's job to manipulate interest rates. Same with the Federal Reserve. The completely legal actions of central banks, holding down interest rates in the hope of avoiding ever having to tackle a recession, helped blow up the property bubble: a property bubble that many of the people now feeling outraged against the banks quite happily participated in.
If people are only now starting to realise what underpins the financial system groups of flawed individuals deciding on key interest rates among themselves then it'll be even more interesting to see their reaction when they start to realise just how messy the whole business is.
How banks are like tobacco companies
Meanwhile, Barclays' share price has slid since this all kicked off. So is all this scandal throwing up any buying opportunities?
Let me declare an interest before I start on this. I really don't like the banks. I hate the fact that they have been held up as the marauding face of capitalism, when in fact they are probably the single worst example of a state-subsidised, parasite industry you could think of. So I'm not sure I like the idea of investing in them.
But then, it's not my job to dictate on investment ethics. I don't like tobacco companies either. Yet, I can see the investment case for them. And on the surface, there are some similarities between the two sectors.
Both are under regular attack. Both are heavily regulated (if not always well-regulated, as with the banks). And in both sectors, it's difficult for new entrants to get a foothold in the market.
However, that's where the resemblance ends. The tobacco business has been through the worst of its reforms. Everyone knows that smoking is bad for you. The regulations in place might be tough, but they also now protect existing players from new competition, which is great news for those that are already in the business.
The problem for the banking industry is that it's just at the start of a long process of reform. That could involve all sorts of costs, none of which it's possible to put an exact figure on now. On top of that, they are very likely to face lawsuits from companies and local governments who feel they lost money due to the messing around with Libor.
My feeling is that, as a private investor, you have no need to stick your money into a sector that's still in secular decline. You're not chained to a benchmark in any way, so you don't need to track the banks.
There's more on the future for the financial industry and Britain in the next issue of MoneyWeek magazine, out on Friday (If you would like to become a subscriber you can subscribe to MoneyWeek magazine).
This article is taken from the free investment email Money Morning. Sign up to Money Morning here .
Our recommended articles for today
Gold miners look good value
While the price of gold remains high, gold mining stocks have taken a real hammering. Matthew Partridge looks at why miners haven't kept pace, and picks the best ways to invest.
Falklands oil players on the cusp of something huge
The Falkland Islands oil business is proceding apace. And in the next few weeks it could take a major leap forward. Tom Bulford explains what's going on.
8 of the best riverside properties for sale
Will “Liberation Day” strike again?
