James Moore: Who can predict what will emerge from swamp?

Outlook It isn’t a great surprise that the results filed by Deutsche Bank and UBS are awash with legal and regulatory costs and provisions.

Both also warned of worse to come. Small wonder. UBS might have just about finished with the Libor interest rate-fixing scandal. But that’s not likely true of Deutsche. Not that its Swiss rival can afford to be complacent. It still has to deal with issues related to its use as a tax bolt-hole by wealthy citizens across Europe and the US.

Both are also facing questions over their dark pool share trading exchanges, indicating that this one goes beyond Barclays, which has pledged to fight a case brought against it by the New York Attorney General that overshadows today’s results.

Then there is that multi-national foreign exchange trading inquiry with the possibility of investigations into other benchmarks to come. They’re just the big ones we know about. Who can predict what else will emerge from the swamp?

While bankers face opprobrium and regulators have (justly) been criticised for not being alive to the cesspool under their noses, few have sought to question what shareholders have been up to.

That’s because, for the most part, institutional investors have been sheltering in the ditch at the side of the road. So they haven’t been caught in anyone’s headlights.

There was, of course, Sir David Walker’s review into banking governance which called for reform. But that was five years ago and it appears little has changed because Sir David, now chairman of Barclays, still periodically laments shareholders’ lack of engagement.

It’s their returns that are ultimately impacted by the enormous, unquantifiable regulatory and legal liabilities their banks face. But the managers of big investment funds seem barely to have noticed.

Just put the Cowes invitations in the post and we won’t kick up a fuss, there’s a good chap. I’m sure our unit holders can take one for the team, what?