Asked to choose between government intervention in the delicate business of innovation and government withdrawal from the field, I always used to plump for the latter. Read more
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
Jeff Bezos is famously smart but I wonder whether he has thought through all the political implications of Amazon’s strategy of becoming back-office ecommerce infrastructure provider to the world.
The first part of FT colleague Barney Jopson’s series on the etailer was full of insight, but it was the comparison between Amazon and investment banks that struck me most forcefully. As Barney writes:
One investment banker says Amazon’s position is reminiscent of Goldman Sachs’ dual role as a broker and trader at the centre of capital markets. “People complain about conflicts of interest. But you still have to do business with them.”
Like Goldman and others, Amazon has set out to simplify the life of its clients, so they can concentrate on what they do best. One business identified by the FT investigation – RJF Books and More – has delegated the “selling, shipping, customer service, payments and complaints” functions to Amazon, which left me wondering what else was left for RJF to do. Simplification was a strong theme of my recent trip to Silicon Valley, where countless start-ups, and a few larger businesses like NetSuite and Salesforce.com, are offering businesses the opportunity to “plug in” their operations to outsourced back-office services and payment systems. Read more
Bob Diamond arriving to give evidence to the Treasury Select Committee on interest rate fixing. Getty Images
Bob Diamond’s keenly awaited appearance before the Treasury select committee promised much and has so far (it was still going on when I broke off to write this post) offered very little for those seeking to know more about the Libor rate-fixing scandal.
But I think the former Barclays chief executive’s responses have shed light on one puzzle: how did the bank underestimate the public revulsion to the outcome of the investigation so badly? The short answer: the bank thought it would receive more credit in the court of public opinion for having helped expose the mess. Read more
Barclays has finally got the order of resignations the right way round. Bob Diamond’s departure – and the temporary restoration of Marcus Agius as chairman, a day after announcing his own exit – hands the can to the man who should have carried it in the first place.
As I wrote in my column on Monday, after Mr Agius said he would go, the resignation of the chairman didn’t mean Mr Diamond had “dodged the bullet aimed at both of them”.
Yet I still think there is worrying evidence that Barclays senior directors are in denial. In ringing the wagons against outside attack, they seem to be pursuing the line that talented individuals have been laid low by external “events” – the word used in Mr Agius’s resignations statement (now rescinded). Read more