Coppola Comment

Nearly five years ago, the former CEO of Barclays Bank, Bob Diamond, defended himself against accusations that on his watch, Barclays had deliberately falsified Libor submissions. To no avail: after widespread adverse press coverage, Diamond resigned. Was this at the instigation of the Governor of the Bank of England and the head of the FSA? We will probably never know. But events yesterday make not only Diamond's resignation, but also the prosecution and jailing of traders and Libor submitters from Barclays and other banks, look distinctly odd. The BBC's Andy Verity has revealed the existence of a recording which appears to indicate that the Bank of England and the Treasury pressured banks to "lowball" their Libor submissions during the financial crisis. According to Verity, the conversation, between a junior Libor submitter (who was subsequently jailed) and his manager, ran like this: In the recording, a senior Barclays manager, Mark Dearlove, instructs Libor...

My latest post at Forbes looks at the implications for Barclays and for the whole financial industry of the latest in a long line of lawsuits. A few weeks ago, following  awful trading results , much of Barclays’ FICC business was consigned to the outer darkness – placed in Barclays’ internal “bad bank” for eventual sale or wind-up. Barclays’ investment bank was to be reduced to a customer service business around an equities trading core – the former Lehman Brothers equities business. But now that equities trading core has itself been dealt a major blow. The New York Attorney General has  filed a lawsuit  against Barclays for misleading clients regarding the presence and activities of HFT traders in its so-called “dark pool”, Barclays LX. Read on here . .

Gold fixing, this time. Here's the FCA's summary : The Financial Conduct Authority (FCA) has fined Barclays Bank plc (Barclays) £26,033,500 for failing to adequately manage conflicts of interest between itself and its customers as well as systems and controls failings, in relation to the Gold Fixing. These failures continued from 2004 to 2013. It seems to have been a rogue trader, one Daniel Plunkett, who rigged the 3 pm Gold Fixing to avoid making a payment to a customer. He has been fined as well and struck off by the FCA. But the timing is exquisite.  The very day after Barclays was censured by the FCA for rigging Libor and Euribor, Plunkett rigged the gold fixing in his favour. Clearly nothing had been learned from the FCA's enforcement action. This is worrying, given the high profile of the FCA's investigation into Libor-rigging at Barclays, and the fact that it cost the bank its CEO as well as regulatory fines and untold reputational damage. It's also i...

My latest at Forbes considers the future of investment banking in the light of cutbacks in just about all global investment banks due to regulatory pressures and changing investor preferences. Barclays is late to the party: In the wake of a  disastrous performance  in fixed income & commodities (FICC) trading,  Barclays   has announced  severe cuts  to its investment bank. 7,000 jobs are to go over the next two years, and much of the troubled FICC division is to be thrown into a  new internal “bad bank”  for eventual sale or winding up. Investment banking is to be reduced to no more than 30% of the Group’s asset base, and rather than trading, its focus is to be on client advisory services, wealth and asset management. The  Diamond days , when investment banking was Barclays’ largest and most profitable activity and its ambition was to be among the premier global investment banks, seem to be well and truly over.... Read on here .

At Forbes, I explain how regulatory changes and a difficult trading environment have forced Barclays to consign half of its investment bank to the scrap heap. What is left looks very familiar, though.....

Barclays’ AGM was a stormy affair. It started with protests about Barclays’ investment policies. For Barclays directors and shareholders, even getting into the Royal Festival Hall meant running the gauntlet of World Development Movement protestors, tax justice campaigners and other pressure groups, all with placards in Barclays’ corporate colours spelling out what they regard as Barclays’ misdemeanors. Colourful, and attractive to attendant journalists. Not the sort of publicity Barclays would have wanted on the day of its AGM.   This was bad enough. But once inside the hall, directors received a distinctly frosty reception from shareholders. And with reason: the bank is proposing to increase executive pay substantially while keeping dividends on the floor, even though its shareholders coughed up an additional £5.8bn not long ago to meet a capital shortfall. Sir David Walker, Barclays’ chairman, made a valiant attempt to defend the indefensible. He insisted it was due ...