Barclays in hot water: the Qatar connection

The heads at Barclays could certainly point out the fate of the Royal Bank of Scotland. The RBS, having accepted the government as virtual majority owner after the bailout run, saw decisions made on its investment bank. The battle between financial-driven desire and taxpayer directed interests persists as an ideological hallmark of the modern market system.

A considerable problem in this affair is whether the SFO is up to the task. The body's record on keeping financial deviancy in check is patchy, even lamentable. Attempts to prosecute alleged manipulations of the Libor system, the benchmark interest rate, have shown it up as a body with less than sharp teeth.

The office will have to assess whether the regulatory bypassing by the Barclays executives was tantamount to illegality, or something short of it. Was this merely exotic round tripping, with transactions that were not entirely connected? The pudding has yet to be baked, but evidence is strong.

The SFO will also have to convince such figures as Jonathan Pickworth of the law firm White & Case, who argues that prosecuting a former management team over decisions made "years ago" would merely "hurt the current shareholders and today's hardworking employees."

The spin in such arguments turns banking organisations into noble toilers who defend, rather than undermine, the public interest. Having crossed their Rubicon, the SFO will test the viability of a system that may well have legislative backing, but has, thus far, failed to yield much by way of results.