Agius self-assured as you’d expect and still loyal to Diamond, despite the fact both have resigned their posts – ex-chair Agius is now temporarily de-facto acting CEO – a little Putin & Medvedev there 😉
Plenty of admission of specific failures. Very clear message that Diamond was and still is wanted and seen as very strong in terms of business leadership from his board and from shareholders. Basically it was the personal loss of regulator confidence that forced the resignation. His full-year severance pay (ex bonuses etc.) is clearly a retainer for his continued cooperation and availability to the bank.
Clear that bankers were in state of terror at the time, but interesting aside that regulators’ saw Barclays itself as the best in class on compliance amongst the big banks.
Other main issue is the demarcation between investment and retailing arms and the “culture” that may or may not be shared within parts and across the whole, and the fact that Diamond was part of the move to unify – mentioned earlier note (1) here. Pretty clear that independence of investment and retailing is going to become the regulators’ preferred strategy going forward – not that that actually excuses local moral failures, whatever the divisional culture. May be that the counter-intuitive unification is actually the better option ? (Lord Thurso – who seems very respectful of Agius personal integrity – is on the right lines … which layers of culture matter is beyond any one business … IMHO)
Interesting also that many of the other perps in other banks were ex-Barclays people … no doubt quite common, as in many industries. Culture is always in layers within and across organizations. Use of the word “low-balling” also tells a story about the original “crime”. Not really concerned here with whether the original manipulation was immoral or illegal – anti-trust collusion – everyone seems to agree it was wrong, whatever I think (I have a bigger agenda) – but low-balling does suggest it was a normal negotiation game as part of setting rates – achieving a low rate was what everyone believed was needed at the time, understood – whatever their individual motivations or (lack of) instructions. A case of ends not justifying means, but clear ends nevertheless.
[Post Note :
This interesting point from Robert Peston last week. When is low-balling, lying ?
“[Barclays] understated [their borrowing rates] to try to reassure the market.
Barclays’ defence is that it was dreadfully unfair that its perceived borrowing costs were higher than other banks. And it is convinced that many of these banks were even bigger liars than it was about what they were paying to borrow.
It also points out that in practice its balance sheet, its finances, were in fact stronger than many of these other banks: its creditors were wrong, it would say, to have so little trust in it [due in part to the complexity and opacity of some of its financial instruments].
So was its lie about what it was paying to borrow justified – especially if the survival of the bank was at stake? And if Paul Tucker at the Bank of England encouraged Barclays to lie, as is implied by Diamond’s memo, would he have been justified in doing so?
As it happens, a number of senior figures in the City who are unconnected to Barclays think this lying was the right thing to do in the circumstances. They think Mr Tucker encouraged Barclays to lie and they applaud him for doing so.
You might well say that is evidence of a cancerous moral relativism at the heart of the City. Or you might applaud their common sense realism.”
My point exactly. Those who did the dirty deed took one on behalf of the whole bank. And, of course, Tucker didn’t actually ask them to lie, to low-ball, he just needed to point out that being too high was a problem, for everyone’s confidence in a time of extreme “skittishness”.]
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