"The real world of human interactions is simply too messy and ambiguous a place ever to be governed by any predefined set of rules and regulations; thus the business of getting on with life is something that is best left to individuals exercising their common sense about what is reasonable and acceptable in a given situation... But occasionally an infraction is striking or serious enough that rules have to be invoked, and the offender dealt with officially. Looked at on a case-by-case basis, the invocation of the rules can seem arbitrary and even unfair... and the person who suffers the consequences can legitimately wonder "why me?" Yet the rules nevertheless serve a larger, social purpose of providing a rough global constraint on acceptable behaviour. For a society to function it isn't necessary that every case gets dealt with consistently, as nice as that would be. It is enough simply to discourage certain kinds of antisocial behaviour with the threat of punishment."
Duncan Watts in Everything is Obvious.
One of the things I've found most surprising about the Barclays/Libor news, is the way that a (smallish) number of people have reacted to Bob Diamond's departure. It's been charaterised as a victory for "the mob", unjustified by what has actually happened.
In defence on this position it seems unlikely that Diamond himself was personally involved in any activity that was illegal. It's also a bit of a stretch to say that he was responsible for creating the culture that led to activity concerned (for what it's worth I think the cultural problem is an industry one, and you can bet it isn't just a dozen dodgy traders, as Diamond suggested). What's more perhaps Barclays has been unfairly damaged by airing its dirty laundry first.
And yet, I am completely unconvinced that Diamond going was anything other than the right outcome, and it might do a bit of good. One of the most unpleasant aspects of recent corporate and political scandals has been the unwillingness of those at the top to take responsibility. I don't just mean the evasive language that is ever present these days - "I am sorry that others did wrong", "Mistakes were made (but not by me)" etc. Rather it's those cases - Jeremy Hunt and James Murdoch spring to mind - where the individual at the centre of events refuses to quit, even though they are damaging the reputation of the organisation they run.
The power of business within politics has increased significantly in the last few decades, and many businesses now play a very political role. Yet the impression you get is that business leaders are less accountable than when they had less political influence. I think this is in large the nature of large businesses as organisations - there is no form of democratic accountability, we have only the weak accountability to shareholders in PLCs. Despite having attained political power, business leaders give the impression that they aren't and don't need to be accountable to anyone, and that forms of accountability that exist in other parts of society serve only to frustrate efficiency if applied to business. As a result business leaders can typically shrug off calls to quit that can be very damaging in the political sphere.
I think this is increasingly problematic for the public legitimacy of business, especially now that businesses are seen as politically influential, but it's potentially explosive for the banks. As recent polling shows, bankers now rank below politicians and tabloid journalists in terms of public standing. The mental thumbnail sketch most people probably have of the banks and the crisis is that they were either stupid or corrupt in the run-up, then took our money to survive, and now want to carry on as if they had just been through a couple of slightly rocky years, but without fundamental change. Therefore I personally think the actions and attitudes of the banks (and Bob Diamond's "the time for apologies needs to be over" was typical) have been dangerous.
It seems likely that Diamond was actually taken out by Mervyn King, perhaps with Lord Turner's support, rather than falling on his sword. But in a sense it does not matter, the symbolism does. The public - and the industry - need to see that even those at the top of the industry are indeed accountable. It might not be a flawless process - but then what is? The important, and over-riding point is surely pour encourager les autres.