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Barclays: he says he gets it Barclays: he says he gets it
(7 months later)
The headline above the chief executive's foreword to Barclays strategic review was arresting. "Barclays is changing," was the message. And about time too, say the rest of us, while still counting the spoons. After the scandals of PPI mis-selling, the Libor rate interest rate scam and the interest-rate swaps rip-off of small businesses, no change was no option for the bank Bob Diamond led to the dark side, behaving all the while as if the global financial crisis and the enforced socialisation of other banks' losses had never even happened.The headline above the chief executive's foreword to Barclays strategic review was arresting. "Barclays is changing," was the message. And about time too, say the rest of us, while still counting the spoons. After the scandals of PPI mis-selling, the Libor rate interest rate scam and the interest-rate swaps rip-off of small businesses, no change was no option for the bank Bob Diamond led to the dark side, behaving all the while as if the global financial crisis and the enforced socialisation of other banks' losses had never even happened.
Much of what Mr Diamond's successor Antony Jenkins said on Tuesday supports his claim to be an agent of change. The words are certainly impressive. Banking lost its way in recent years, Mr Jenkins confessed. It put short-term profits before long-term interests. It sold products that boosted profits but were against customers' interests. Now there will be no going back. The bank must act at all times with good values. Staff who don't agree should leave or be booted out. Yes, he said, it will be years before the public trusts the banks, but the work has to be done. Last week Mr Jenkins told MPs he was shredding his predecessor's legacy. His buzzword was "Transform", a strategy that will sweep through Barclays and which, for 3,700 employees outside the UK, means the dole.Much of what Mr Diamond's successor Antony Jenkins said on Tuesday supports his claim to be an agent of change. The words are certainly impressive. Banking lost its way in recent years, Mr Jenkins confessed. It put short-term profits before long-term interests. It sold products that boosted profits but were against customers' interests. Now there will be no going back. The bank must act at all times with good values. Staff who don't agree should leave or be booted out. Yes, he said, it will be years before the public trusts the banks, but the work has to be done. Last week Mr Jenkins told MPs he was shredding his predecessor's legacy. His buzzword was "Transform", a strategy that will sweep through Barclays and which, for 3,700 employees outside the UK, means the dole.
Some of what Mr Jenkins announced has been forced on him. No bank whose pre-tax profits fell steeply last year, as Barclays' did, from £5.9bn to £246m, can afford to ignore such figures. Some of that slump is entirely Barclays' own fault, caused by fines over Libor and set-asides for payouts. Other parts of what he said will need to be tested against the facts to see if it comes up to scratch. Mr Jenkins, who rose through the bank when it was run the Diamond way, got a lot of kudos last week by pre-announcing the shutdown of the tax-avoiding structured capital markets division. But the division will generate legacy work – and profits – for years to come. And while Mr Jenkins is passing up his own bonus and reining in the share of rewards to execs and staff alike – down from 42% of company income to 38% and heading south – Barclays has not suddenly abolished the internal and external financial and ethical distortions of the past.Some of what Mr Jenkins announced has been forced on him. No bank whose pre-tax profits fell steeply last year, as Barclays' did, from £5.9bn to £246m, can afford to ignore such figures. Some of that slump is entirely Barclays' own fault, caused by fines over Libor and set-asides for payouts. Other parts of what he said will need to be tested against the facts to see if it comes up to scratch. Mr Jenkins, who rose through the bank when it was run the Diamond way, got a lot of kudos last week by pre-announcing the shutdown of the tax-avoiding structured capital markets division. But the division will generate legacy work – and profits – for years to come. And while Mr Jenkins is passing up his own bonus and reining in the share of rewards to execs and staff alike – down from 42% of company income to 38% and heading south – Barclays has not suddenly abolished the internal and external financial and ethical distortions of the past.
Far too many bankers remain in denial about the need for change in their sector. Politicians remain too cautious as well. So Mr Jenkins' readiness to say "We get it" was important. The words have been a long time coming, but the pitch-perfect way Mr Jenkins spoke suggests a watershed may have been reached. There is a long way to go, of course. The practice still needs to match up to the words. But the words are being uttered – and that is a step towards the still distant day when they can be confidently believed.Far too many bankers remain in denial about the need for change in their sector. Politicians remain too cautious as well. So Mr Jenkins' readiness to say "We get it" was important. The words have been a long time coming, but the pitch-perfect way Mr Jenkins spoke suggests a watershed may have been reached. There is a long way to go, of course. The practice still needs to match up to the words. But the words are being uttered – and that is a step towards the still distant day when they can be confidently believed.
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