The news that Temasek, the Singapore investment fund, may dispose of its £6bn stake in Standard Chartered, has reignited talk of the British bank finally losing its independence. I will believe it when I see it.
No doubt Standard Chartered will cease to exist as an independent bank one day, but I have heard speculation about it for 20 years, and it never quite seems to happen. It is like talk of the dollar losing its status as a reserve currency. Read more
The “fit and proper” test is regulators’ and professional associations’ tool of choice for assessing suitability for office – a spirit-level for acceptable conduct. Read more
If regrets, apologies and promises to behave better were redeemable for cash, the world’s banks would be rolling in it. Read more
Antony Jenkins, new chief executive of Barclays, and Rich Ricci, chief executive of corporate and investment banking, have said the right thing. Can they now do the right thing?
The rhetoric of their speeches to analysts on Monday was fine. Mr Jenkins said Barclays would “operate to the highest ethical standards. It will be balanced, less risky and more profitable”. Mr Ricci expanded on this:
We have always scrutinised our businesses based on their ability to generate returns, with careful evaluation of risk and controls embedded in that analysis. Now however, I feel it is appropriate to modify that assessment by explicitly looking at reputational risk as the first hurdle. We have to take a fresh look to see if there are products and services in which, given the changing environment, we no longer deem it appropriate to do business, regardless of financial return.
Barclays may rue having declared its involvement in the Libor lending rate scandal first, but as a consequence it has had first choice of “City grandees” to replace its chairman, Marcus Agius. The bank has managed to land the grandest of those grandees, Sir David Walker.
Author of the Walker report on governance in the financial system (probably the most downloaded document at Barclays’ HQ this week), Sir David is the squeaky-clean face of the old word-is-my-bond City of London, with experience on both sides of the regulatory fence. In 2009, he was one of five wise heads appointed by the Financial Services Authority to vet senior appointments to UK financial institutions (it might be interesting to know just how many of the current and outgoing crop of Barclays’ senior management he helped to approve). If you’re in doubt about what a grandee is, or whether you are one, take my patented multiple-choice questionnaire, published at the time. Read more
The sense of shock in London about the allegations levelled against Standard Chartered goes well beyond the stock market where – as of mid-morning on Tuesday – the shares were down by nearly a quarter.
The group is virtually the only large UK bank not to have suffered serious reputational damage over the past five years. That’s partly because its operations are mostly outside the UK and other developed markets, partly, the bank would say, because of its strong culture.
As a result of that unique position – and the high reputation of its senior management — it was the safe harbour of choice for government ministers and their advisers in autumn 2008, when the rest of the UK banking sector was on the brink of collapse. The recapitalisation and rescue plan for the industry, later copied elsewhere, was cooked up in its boardroom, with the help of its top executives, generating a mass of laudatory coverage. Read more
Nearly four years after the Wall Street bailout, the beneficiaries of the US government’s support are battered and unpopular, but still in business. Meanwhile, the regulators that rescued them are in trouble. Read more
“I can’t be confident about anything after learning about this cesspit” – Paul Tucker, deputy governor of the Bank of England, to the House of Commons Treasury committee, July 9, 2012.
Paul Tucker’s disgust at the Libor rate-rigging scandal (echoing business secretary Vince Cable) sent me back to records of the last time a foul stench of rottenness overwhelmed the UK parliament: the “Great Stink” of 1858. In that year, the smell of raw sewage, decanted into the Thames through overburdened sewers, reached the Palace of Westminster. It prompted emergency debates on “the state of the Thames”, in which R.D. Mangles, MP, told the House of Commons (as reported by Hansard): Read more