Moody's has just changed Barclays' outlook from stable to negative. In a nutshell, it's an HR issue. Here's a breakdown of the statement:
Moody’s decision to change the outlook on Barclays’s C-/ baa2 standalone rating to negative from stable reflects the rating agency’s concerns that the senior resignations at the bank and the consequent uncertainty surrounding the firm’s direction are negative for bondholders.
Finding someone to replace Diamond will be key to re-establishing confidence in the bank. But this will be hard:
Moody’s believes that the bank could be challenged to replace the three senior staff and in particular find a new CEO who not only has a sufficient understanding of the investment banking business to run Barclays, but also has the credibility and ability to swiftly address the weaknesses that the LIBOR incident revealed and stakeholders’ perceptions of the investment bank.
Without the anchor of a strong and credible CEO, Barclays could drift away from their prized investment banking arm and more towards retail, under a tide of political pressure:
..... the shareholder and political pressures on Barclays, which resulted in the resignation of the bank’s CEO, COO (previously the head of the investment bank) and the stated intention of the Chairman to resign, could lead to broader pressure on the bank to shift its business model away from investment banking and reform perceived failures in its business culture.
However, this shift might well end up being a good thing for Barclays:
Although this could have potentially positive implications over the longer term, the uncertainty surrounding such a change in direction is credit negative in the short term.
To sum up: if Barclays don't get their act together and find a new CEO pronto, things are just likely to get worse:
Moody’s says that Barclays’ senior debt and standalone ratings could experience further downward pressure if the bank proved to be unable to restore a stable management structure over the coming months.