Diamond cut: Bob-a-Job no more.

It turns out that diamonds are not forever. In the wake of the rate-rigging revelations Barclays Chairman Marcus Agius fell nobly upon his sword. Two days later, Chief Executive Bob Diamond has toppled too, but needed no small nudging. Already due to be lightly grilled by the Treasury Committee on Wednesday, the heat on Mr Diamond was increasing daily, to an extent that he felt it was “damaging the franchise”.

Chancellor George Osborne said it was the right decision, hinting at a sea-change to a “culture of responsibility in British banking”. Central to that should be the impending parliamentary review into banking practices, announced yesterday by the Prime Minister.

With labour leaning more towards a full public inquiry however, Ed Miliband feels that Britain won’t buy “politicians investigating bankers”. After assorted scandals and self-service on both sides, some may indeed struggle to assess which have cost us more and helped us less. By contrast, David Cameron concludes that a parliamentary inquiry is “the right approach”, as it should be swifter to establish. The theory goes that resulting recommendations, if accepted, could seamlessly slip into the Financial Services Bill. Wonder who’ll end up paying that one.

 Political posturing aside, the focus should be product not process. Surely the success of this inquiry swings on not needing another one next time. I concur in part with the TUC’s Brendan Barber, that it’s not “the number of heads that roll, but whether it leads to the root and branch reforms…”

 For manipulating the inter-bank lending rate, Barclays were fined £290 million and the boss lost his bonus. It’s a sizeable slap to the Rolex adorned wrist, but is it a sufficient deterrent for the Masters of the Universe? Mr Diamond, a former boss of Barclays’ investment arm, said; “I am sorry that some people acted in a manner not consistent with our culture and values.” Some may suspect the exact opposite is true, that it’s the casino culture created in some sectors that encourages actions consistent with a complete lack of values.

Diamond has been cut, but whether he was just grazed, or polished up and knighted is more symbolic than seismic. If you divorce retail banking from its riskier relation, cross-contamination could conceivably be controlled. Otherwise, without robust regulation, the great and the good of Westminster and the City will have their backs mutually scratched and patted, but rarely put up, to protect from rocking the boat. It’s time to set a new course.