There was a time when regulators caught red-handed abusing their privileges, aka, doing nothing in the face of glaring malfeasance, would quietly fade away only to even more quietly reappear, sans press release, as a third general counsel or some other C-grade menial role paying a minimum 6 figure compensation to the individual for years of doing nothing. This is no longer the case: it appears that the best such exposed "regulators" can hope for going forward is to get media positions. Such is the case with John Ewan. Who is John Ewan? None other than the director "responsible for the management of the setting of Libor" at the British Bankers' Association. In other words, the man whom The Sun of all non-captured publications (oddly enough, tabloids sometimes have more journalistic integrity than Reuters and the FT as we will shortly find) has dubbed Mr. Libor. The Sun continues: "In a staggering profile on the internet Mr Ewan reveals he joined the BBA in 2005 to “put Libor on a secure commercial footing”. That year Barclays traders began fiddling the figures they submitted for the Libor calculations. On the LinkedIn networking site Mr Ewan boasts of generating a “tenfold” increase in revenue from licensing out the Libor rate." He adds: “I introduced new products and obtained EU, US and Japanese trademarks for BBA Libor. "I successfully negotiated contracts with derivatives exchanges and all of the major data vendors." Well, in the aftermath of Lieborgate surely Ewan is going to someone receptive to his permissive and highly profitable tactics over the years, such as Barclays. Actually no: instead of a bank, the only place that is willing to accept Ewan is media conglomerate Reuters. And not just as anyone: "Thomson Reuters confirmed that Ewan has joined the company as head of business development for its fixing and benchmark business." We wonder how much revenue Mr. Ewan generated for Reuters?
Why Reuters? The WSJ provides a hint:
Libor is used as a benchmark for hundreds of trillions of dollars of loans and derivatives and, as administrator of the rate, the BBA and its process for setting Libor have also come under scrutiny. The BBA is currently in the process of reviewing the Libor-setting process.
The benchmark is compiled by the BBA in conjunction with Thomson Reuters. The data provider surveys a panel of large banks every morning for the rate at which those banks would expect to be able to raise a large loan in the interbank market at that time. Thomson Reuters calculates the average industry-wide benchmark based on those submissions. The rate is then published to the market by Thomson Reuters and other licensed data vendors.
In other words, once the regulators are done with the BBA, a brief inquiry into Reuters may be next, which on top of being an instrumental part of the daily Libor fixing dissemination process, has just hired one of the most contentuous former BBA employees. This promises to be very amusing because if nothing else, the media turning on itself always yields the most theatric results. Naturally by hiring Ewan, Reuters is essentially inviting attacks on its own set of Libor-practices.
How did Ewan defines himself while at the BBA? Since he no longer figures on the website, we have to revert to Google cache:
John Ewan is responsible for the management of the BBA LIBOR rate setting process and the annual review of the panels of banks contributing to the rate setting process. He also manages the BBA's other benchmarks, such as daily REPO rates and the LINDEX Emerging Market Index Rates. John is the point of contact at the BBA for all technical and commercial queries regarding these services.
Prior to the BBA, John worked for FTSE Group where he wrote and maintained the ground rules that govern FTSE's stock market indices and acted as secretary to various of the independent committees that oversee and review the constituents of these indices.
Some more on Mr. Libor from the WSJ and Sun:
Ewan created BBA Libor Ltd. as a company within the BBA Group in May 2010 in order to take overall authority for the entire Libor business, according to his LinkedIn profile.
He had been a secretary of the Libor setting committee, the administration group within the BBA in charge of Libor, although was not a member of it. He had also been on the BBA Libor board, alongside Angela Knight, the outgoing chief executive of the BBA, and other senior association officials.
On his LinkedIn profile, Ewan said that he that he obtained EU, U.S. and Japanese trademarks for BBA Libor and negotiated contracts with derivatives exchanges, data vendors and "hundreds of other users."
He also boasts of “excellent relationships at a senior level” with both the Financial Services Authority — the City regulator — and the Bank of England.
He adds he was a “contact and source” for the Financial Times.
What were the conditions of Ewan's departure? From the WSJ:
A source close to the situation said Ewan's move to Reuters was unrelated to the Libor scandal.
Well, of course they would say that. Some more color from the Sun:
The BBA yesterday insisted Mr Ewan’s departure was NOT linked to the scandal — and that he had told them he was leaving in April.
He quit the BBA last week and will be in charge of business development at Thomson Reuters — an organisation that collates the figures for the association. Mr Ewan was unavailable for comment yesterday.
Of course they would say that too (just as they added that he would not be replaced as a director during the investigation). Yet as the attached resgination notice dated July 19 shows, he resigned only on July 13: well after Lieborgate became all the rage? Just why is Mr. Ewan in such a hurry to cover all his tracks as he joins his new employer? And speaking of Reuters, an interesting tidbit from his LinkedIn profile recommendation shows that he was quite in demand by not only Reuters...
"John was my primary contact at The British Bankers Association during a period of 4 years whilst I worked at Thomson Reuters. He is a subject matter expert on the construction, governance and scrutiny of market benchmarks. John has provided valuable insight to Central Banks and Regulatory bodies looking to commence their own market benchmarking activities. John also works tirelessly to promote the interests of The BBA and the LIBOR suite of benchmarks to domestic and international audiences. I have enjoyed working with John, trust his depth of knowledge and have benefited from his international insight."
... But quite a few others:
"I worked with John over a number of years at the BBA. I found him to be hard working, dedicated and enthusiastic person. His positive attitude and extensive experience drove the BBA LIBOR business forwards. During the height of the crisis he was a solid and reliable presence, whose connexions in the market and wide experience enabled LIBOR to deftly navigate a very difficult period. John always worked assiduously to develop his staff, particularly enhancing their skills, experience and engendering confidence."
"It is my pleasure to serve on a BBA committee led by John, who has consistently shown a first class degree of professionalism and market knowledge in the running of the committee. He displays excellent media handling skills and the foresight to chart the future development of BBA libor as a product."
"I worked with John for two years helping him run the LIBOR benchmark. During that time we tripled revenue and signed licences with hundreds of clients globally. John's commercial acumen and negotiating skills are excellent, and he is highly effective in dealing with stakeholders from across the markets - buy side, sell side, regulators, central banks and the media. I learnt a great deal from my time working in John’s team, and would welcome the opportunity to work with him again in the future."
Ewan's departure from the BBA is the first significant exit from the trade association since Marcus Agius, the outgoing Barclays chairman, stood down from his role as chairman of the organization July 2.
We would call it something less politically correct: the first rat has left the sinking ship. And the fact that a supposedly objective media publication has accepted him with open hands probably tells us why so few media entities (with some notable exceptions) dared to utter a peep over the corrupt and broken Libor practices for the past 4 years, even though the daily manipulation was there staring everyone in the face for years and years.
Finally, as Ewan's colleagues will find out the hard way (as will everyone in Europe who is not Greece), he who defects first, while never the optimal solution, defects best. As the BBA is slowly dismantled piece by piece, the thousands of colleagues Ewan left behind may find it a little harder to find a job at either banks, or even media organizations, now that the stigmata of Lieborgate has reached sky high, and is only going higher.
As an apendix, here is the auto response his email sends out to anyone curious to find out more about the terms of either Ewan's departure, or the financial package promised him by Reuters:
I have moved on from the BBA.
my colleagues will be happy to help you:
For issues relating to BBA LIBOR:
For Media enquiries please contact Brian Capon on +44 (0)207 216 8810, email@example.com or Brian Mairs, also on +44 (0)207 216 8810, firstname.lastname@example.org. Outside of UK business hours +44 (0)207 216 8888
Alternatively, please contact my secretary, Christine Norris, on +44 (0)207 216 885 or email@example.com