Barclays' creek proves deeper, longer and browner than first thought

The Guardian had another set of articles on Barclays' tax structuring group yesterday. The point is not whether the practices of this group are legal. Some may be; some are borderline; some may not be. The point is the continuing reputational damage being done to the Bank as these articles continue.

Any firm with a tax structuring activity must be asking themselves how this group's transactions would be taken by their clients, regulators, tax authorities, and other stake holders were they to be made public. If, as I suspect, the answer in most cases is `rather badly', then perhaps the practice of structuring transactions simply to avoid paying tax will be moderated. I think that this business is immoral and damaging to the reputation of honest bankers, and I know a lot of people do too. Do you really want to live in a world where banks have large groups of smart and well paid people just to ensure that there are fewer schools and hospitals?

Of course, the real answer is tax modernisation. Barclays and the rest can only play their games because tax codes are so complex and international tax treaties can be arbitraged. While we might deplore the practice of tax arbitrage, at least some of the blame must go to the government for not closing the loopholes.