Barclays' 'culture of pushing the limits'

 

Libor scandal: Del Missier 'instructed' by Bob Diamond

Jerry del Missier's evidence to MPs, coupled with that of Andrew Bailey of the FSA, reinforced what many will see as a depressing picture of Barclays as a giant global bank with pockets of severe rot in its culture.

The former number two at the bank - who resigned just under a fortnight ago - said that he was unaware of systematic lying over several years about the interest rates the bank was paying by traders who worked for him.

For Mr del Missier, this represented "control failures" on his and the bank's part.

He also revealed that when the bank's compliance officers - its internal policeman - were told in the autumn of 2008 by the money-market desk that the Bank of England had instructed Barclays to understate its borrowing costs, none of those internal policemen bothered to check out whether such an instruction had actually been given.

As for the FSA's Mr Bailey, he said that earlier this year he lost patience with what he saw as a habit at Barclays of gaming the rules, or trying to get round them by sticking to the letter but not the spirit.

Mr Bailey said of Barclays: "There was a problem with this institution and the problem came from the tone at the top".

Start Quote

I relayed the content of the conversation I had with Mr Diamond and fully expected the Bank of England views would be fully incorporated in the Libor submission”

End Quote Jerry del Missier Former Barclays executive's evident to MPs

The FSA's chairman, Lord Turner, saw this problem as "a cultural tendency to be always pushing" the limits of the rules.

Mr Bailey agreed that meant Bob Diamond, who recently resigned as chief executive of Barclays, was not taking sufficient steps to clean up the bank.

What for many will be the most striking element of Mr del Missier's testimony was his clear recollection that Bob Diamond, in a telephone call, had passed on an instruction from the Bank of England to lie about the interest rates Barclays was paying.

That is world's apart from what Paul Tucker, deputy governor of the Bank of England, says he conveyed to Mr Diamond - and differs from Mr Diamond's recollection. Both deny that any such instruction was given.

MPs were understandably bemused by how there could be such extraordinary misunderstandings of such a highly sensitive issue by three such senior City figures.

As for the FSA, there is an apparent contradiction between its lecturing of Barclays to clean up its culture earlier this year and the approval it gave for the promotion of Mr del Missier to be Barclays' number two. That approval was given just days before Barclays incurred record fines and penalties for Libor wrongdoing - which in turn prompted Mr del Missier to resign.

Some will say that shows the FSA is not, to use the cliche, a joined-up organisation, since it was aware Barclays would be severely punished for lying about interest rates.

But, of course, the embarrassment is greatest for Barclays, which is fast losing what is as important to a bank as capital to absorb losses, namely a reputation for integrity and competence.

Unsurprisingly, Barclays' shareholders and regulators are telling the banks' board that in replacing its chairman and chief executive, one of those important jobs must be filled by an outsider.

 
Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

This column...

This column may be a bit quiet for a bit, because I am away from the office.

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  • Comment number 370.

    All this user's posts have been removed.Why?

  • rate this
    0

    Comment number 369.

    Not only is the behaviour being revealed unappealing,(the excuses offered are pitiful),.but they don't even seem all THAT bright.

    I mean you expect Masters of the Universe to shape up better than Barclays Jerry & Bob, BoE Paul & G4S Nick--- if you dressed them down a bit and they rocked up to your front door offering to black top the drive...you'd take one look and say 'No thanks' wouldn't you?

  • rate this
    0

    Comment number 368.

    Tony Hancock said in the Blood Donor "If you can't trust blood donors, who can you trust?". Well, it does not seem to be some bankers, corporate bosses and politicians. The way to survive now for a CEO or cabinet minister is to ask nothing so nothing can be asked. Mrs.May is good at this, as with the G4S nonsense. Surely she asked how it was all going? Or is she that disinterested until prodded?

  • Comment number 367.

    All this user's posts have been removed.Why?

  • rate this
    0

    Comment number 366.

    If they were wearing hoodies they'd be chucked in prison for 100 years! Worse than the rioters from last year, but they get away with it, even helping savage headchoppers in Mexico is ignored!

  • rate this
    +1

    Comment number 365.

    MPs were understandably bemused by how there could be such extraordinary misunderstandings of such a highly sensitive issue by three such senior City figures.

    000

    Perhaps one day Miss Understanding will tell her side of the story in her autobiography "Lolly Taaa "and produce the dress to prove it

  • rate this
    +1

    Comment number 364.

    Shiver me timbers the barclay banksters have been caught in the rigging after a purely planktonic relationship with themassses whos only wish [during their hamlet moment ]was to be beamed up to cloud 9 by the startwreck enterprize jolly rodgers crew on AAAsteroids

  • rate this
    +2

    Comment number 363.

    Barclays rigged Libor, HSBC knowingly laundered billions of $, Lloyds knowingly missold PPI, and RBS had Sir Fred and can't supply basic customer service.

    They're all as bad as each other.

    So someone please explain why not one of these crooks is in jail.

  • rate this
    0

    Comment number 362.

    is there a problem with the top button of your shirt?

  • rate this
    0

    Comment number 361.

    360..A/P//

    Yup...its racketeering en masse...

    Not all banks / finance of course...nor all bankers / financiers..

    But a gimlet eye on the big players and the subversion of the political elite and judiciary reveals the legitemised gangsters..

    The Cosa Nostra shadow state writ large throughout industrialised democracies..

  • rate this
    0

    Comment number 360.

    In insurance, I have to complete regular training on Money Laundering. If I have the slightest doubt about a transaction and don't escalate it up the chain of command, I face 5 years in jail, the sack, and a fine for the company.

    So why, in the banks, does that not apply to the people up the chain who are expected to act on the info passed to them.

    These guys put the Mafia to shame.

  • rate this
    +1

    Comment number 359.

    @350 Double Dip

    "Lecturing is all very well after the event - but we need to be careful that we don't force these successful business away from our shores.".

    I would hardly characterise the wiping out of every cent from the stock market that was made in the last decade as a success. But then again I've gotten used to thinking in quite different terms when talking to the average banker.

  • rate this
    0

    Comment number 358.

    HSBC & Drug money & Barclay's & LIBOR - Paging Angela Knight!!!!

  • rate this
    0

    Comment number 357.

    348.FG

    "The more barriers to entry the better."

    Quite.

    Co-op. Verde. Bankers take precedence (and charge). A barrier to ethical management of non-banking as well as banking.

  • rate this
    +3

    Comment number 356.

    When one looks at the timeline for subprime collapse..ie Countrywide ( largest subprime lender) one notices, the wholesale fraud by law firms in US courts...esp collusion by Countrywide and LA superior court ..

    Fraud and corruption in courts by judges and law enforcement agencies...many cases are under seal.

    Despite congressional hearings, the fraud continues..

    Any faith in justice ?

  • rate this
    0

    Comment number 355.

    345. Under-Used
    "It should also be obvious to anyone with half a brain that that isn't acceptable..."
    ~
    I agree with you 100%, but it will never happen, the real culprits, who are in control, will not allow it.
    You'll do what the 'Sun' tells you, and if you don't you'll suffer the same fate as Iraq, Libya, Syria and soon Iran, that is, you'll toe the US line.
    Financial terrorism. 400ch!

  • rate this
    +1

    Comment number 354.

    350.

    They have apologized for being a conduit for drug smuggling, their compliance director has resigned... did you miss this

    They can go let us go back to actually producing something tangible. Instead of quantitative easing how about supporting manufacturing. .

  • rate this
    +2

    Comment number 353.

    "I wish these cushy public sector types would wake up and realise that in the real world it's a fight for survival that pays their salaries and inflated pensions."

    I work in the private sector.

    I am able to distinguish between minding the till, and taking a shovel to it

  • rate this
    +3

    Comment number 352.

    350. Double Dip

    Of course they pushed the limits - they're a goddam business that needs to kill or be killed.
    -------
    You make it sound just like war mafia wars..

    "Success" and criminality seem to be synonymous with one another these days.

    Clot.

  • rate this
    +2

    Comment number 351.

    In true British style this is being brushed under the carpet as a just a 'misunderstanding', a few exceptional cases. We look at countries like Russia, Italy and France with horror at some of the corruption and seem oblivious to the fact that ours is worse than the lot!

 

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