Barclays' little story and how it changed banking culture

Top City boys queue up, two by two, for a grilling.

This week has seen top City boys queuing up, two-by-two, as the Parliamentary Commission on Banking Standards (PCBS) called them in for a grilling on UK banking standards, rate-rigging scandals and big fat cheques.

In the firing line this morning was Anthony Jenkins and Sir David Walker, Barclay’s group chief executive and chairman, after Lloyds’ on Monday.

During an intense three-hour inquiry, Jenkins told the committee he was “shredding” the legacy left by his former boss Bob Diamond, after (quite publicly) rebuffing a £2.75m bonus having decided it would be “wrong” to receive a cheque too fully-loaded.

It is still far too early to see whether there has been any material change in Barclays’ culture. Rome wasn’t built, or-re-built in a day, and the jury will still be left with a few big questions over the British bank’s cultural DNA after today’s session.

Diamond on his part had received a £2.7m annual bonus for 2011, a pay check of £17m (with the bank paying also his £5.7 tax bill) after resigning amid the interest rate rigging scandal.

The boss was known to lead an "aggressive" and "self-serving" culture in the bank, the committee heard, while hush-hush talks in the City from former Barclays’ people push it a bit further, describing it as “rotten”.

The multimillion-bounty led to the forced resignation of Alison Carnwath, former chairman of the Barclays remuneration committee, who claimed to have been the lone voice for Diamond receiving "zero" bonus.

Along with Walker, Jenkins announced, avoided –and confessed- a few things.

The Committee jumped at the chance to enquire about The Bonus, remuneration and more specifically Sir John Sunderland, the man in control of it –he who replaces Mrs Carnwath.

“The problem we have with [Sunderland’s] evidence is that he didn’t think he had made a mistake (in regards to Bob Diamond's pay off), even in retrospect?” the committee asked.

“You'll have to trust my judgement,” replied Walker, in what looked more and more like a battledome.

Walker and Jenkins informed the MPs of a bonus slim down at Barclays following yet another £1bn provision to cover compensation for interest rate swap products and mis-selling of payment protection insurance (PPI).

According to Barclays, the scandal-hit year is now costing the bank around £2.6bn in compensation: PPI damages will go to borrowers who were (mis-)sold loan insurances (to protect them if they missed repayments due to illness or redundancy), but were not actually eligible to claim it.

During the tense discussion, Jenkins let out that he would step down if there was a regulatory failing under his watch.

This comment seemed too trouble-free for the Committee not to pick upon: Jenkins was head of Barclaycard from 2006, and throughout the time PPI products were sold.

“We worked hard to modify PPI products and we didn't get it right completely” was what Jenkins had to answer. He added: “it's a question of proportionality.”

This answer baffled the Committee; but not as much as when he spoke about the LIBOR-fixing –which cost the bank $450m in fines. “I first learnt about Libor on the day the Libor fine was announced,” he said.

When the committee asked him if he questioned the banking culture while working closely with Diamond, Jenkins took the time before calmly answering, “Yes.”

What he meant by this assent, was that he had been arguing “for a change in culture since 2012.”

Rumours were sparked by Committee chairman Andrew Tyrie when he said it was possible the Barclays bosses would be called in before the Committee again.

But next in line for the grilling are JP Morgan and HSBC’s heads, who will give the Committee more to query until their new report is published.

Photograph: Getty Images

Elsa Buchanan writes for VRL Financial News

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PMQs review: Jeremy Corbyn turns "the nasty party" back on Theresa May

The Labour leader exploited Conservative splits over disability benefits.

It didn't take long for Theresa May to herald the Conservatives' Copeland by-election victory at PMQs (and one couldn't blame her). But Jeremy Corbyn swiftly brought her down to earth. The Labour leader denounced the government for "sneaking out" its decision to overrule a court judgement calling for Personal Independence Payments (PIPs) to be extended to those with severe mental health problems.

Rather than merely expressing his own outrage, Corbyn drew on that of others. He smartly quoted Tory backbencher Heidi Allen, one of the tax credit rebels, who has called on May to "think agan" and "honour" the court's rulings. The Prime Minister protested that the government was merely returning PIPs to their "original intention" and was already spending more than ever on those with mental health conditions. But Corbyn had more ammunition, denouncing Conservative policy chair George Freeman for his suggestion that those "taking pills" for anxiety aren't "really disabled". After May branded Labour "the nasty party" in her conference speech, Corbyn suggested that the Tories were once again worthy of her epithet.

May emphasised that Freeman had apologised and, as so often, warned that the "extra support" promised by Labour would be impossible without the "strong economy" guaranteed by the Conservatives. "The one thing we know about Labour is that they would bankrupt Britain," she declared. Unlike on previous occasions, Corbyn had a ready riposte, reminding the Tories that they had increased the national debt by more than every previous Labour government.

But May saved her jibe of choice for the end, recalling shadow cabinet minister Cat Smith's assertion that the Copeland result was an "incredible achivement" for her party. "I think that word actually sums up the Right Honourable Gentleman's leadership. In-cred-ible," May concluded, with a rather surreal Thatcher-esque flourish.

Yet many economists and EU experts say the same of her Brexit plan. Having repeatedly hailed the UK's "strong economy" (which has so far proved resilient), May had better hope that single market withdrawal does not wreck it. But on Brexit, as on disability benefits, it is Conservative rebels, not Corbyn, who will determine her fate.

George Eaton is political editor of the New Statesman.