Barclays board on the rack, says ALEX BRUMMER: Flaccid members fixated on returns moderately than values and UK regulators in thrall to City institution

  • Barclays has been a lightning rod for regulatory failings
  • Successive chairmen have discovered it not possible to stabilise chief govt function 
  • Can administrators bear to be a part of morally reprehensible charade for much longer?

What is it about Barclays? It is admirable that amid the turmoil since the monetary disaster that the financial institution, which traces its origins to City alleyways in 1690, is maintaining the flag flying. Most Continental monetary teams give up funding banking as too pricey and dangerous.

It could be extraordinary if London, as the world’s most vital international trade and spinoff buying and selling centre, did not have a UK-domiciled financial institution with pores and skin in the sport.

Barclays’ dedication to compete with Wall Street gamers Goldman Sachs, Morgan Stanley and JP Morgan is ok, and a credit score to ambition when different High Street banks have change into threat averse. It has additionally been Barclays’ downfall.

In its pursuit of funding banking, it has been a lightning rod for regulatory failings. And, for quite a lot of causes, successive chairmen have discovered it not possible to stabilise the chief govt function.

Aussie-American James Gorman has been chief govt of Morgan Stanley since 2010. Jamie Dimon has been boss of JP Morgan since 2005 and reveals no signal of stepping again. At Barclays, the story may be very completely different. John Varley was at the helm in the monetary disaster. He gave technique to American Bob Diamond who was changed by shopper banker Antony Jenkins. He made means for Jes Staley (employed from JP Morgan), succeeded by CS Venkatakrishnan, who has not loved better of well being.

A standard issue working by the revolving Barclays’ door is regulatory scrapes. Varley (along with Diamond) managed to keep away from a UK authorities bail-out however required a collection of offers with Middle-East potentates, which subsequently have been challenged in the courts.

Diamond, who’s the most important architect of the present funding financial institution, was dismissed by former governor of the Bank of England Mervyn King over involvement in the international Libor rate of interest scandal.

Staley constructed on the Diamond legacy, and thru sturdy efficiency noticed off the risk from activist investor Ed Bramson.

What is obvious now could be that the Barclays board, headed by former Rothschild & Co grandee Nigel Higgins, and to a lesser extent regulators, sought to maintain Staley on board after a collection of mishaps.

One understands the motive. Staley is an efficient funding banker, skilful at constructing and sustaining a buying and selling presence. He backed Elon Musk at Tesla lengthy earlier than anybody guessed the electrical automotive firm would change into the Most worthy in the world.

His success and convincing household manner meant {that a} Barclays board, in the end chargeable for oversight of ethics, was far too prepared to take what he mentioned at face worth. No one in the UK might probably be unaware of the sleaze surrounding Staley’s former consumer and pal Jeffrey Epstein.

It resulted in the King’s brother Prince Andrew being forged into the outer darkness and British socialite Ghislaine Maxwell ending up in an American jail.

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Yet despite all the public noise, the Barclays board continued to assist Staley’s model of his dealings with Epstein, concluding he had been sufficiently clear with executives.

As for regulators, solely the former Bank of England governor Mark Carney was sufficiently conscious of the hazard that Staley’s relationship to Epstein may pose to Barclays. He reportedly requested Higgins to inform Staley to think about his place. On this event (in distinction with Diamond), the governor’s intervention was not adequate.

As the web closed round Epstein’s associates in November 2021, and a torrent of recent details about the intimacy of the relationship between intercourse offender Epstein and Staley emerged, the Barclays boss resigned to clear his title. The newest repellent trove of emails, launched because of a lawsuit lodged by the Virgin Islands in opposition to JP Morgan, alleges exchanges of pornographic photographs and the use of the names of Disney characters to explain Staley’s encounters as an Epstein visitor. The salacious particulars are an enormous embarrassment for different monetary bigwigs who fawned over Epstein.

Most critically, it reveals flaccid members of Barclays board fixated on returns moderately than values and UK regulators in thrall to the City institution. If honour nonetheless exists, the chairman and non-executives at Barclays must be contemplating whether or not they can bear to be a part of this morally reprehensible charade for much longer.

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