Banks

Tom Burgis

Welcome to our live coverage of Marcus Agius’ testimony to MPs. The outgoing Barclays chairman faces questions on rate-rigging by the bank’s traders and his defence of Bob Diamond. By Tom Burgis and Ben Fenton in London. All times are London time.

12.53 That’s that for our live coverage of Agius’ evidence. That was brutal — even if the outgoing Barclays chairman somehow contrived to compare himself to Donald Rumsfeld and his bank to Roger Federer.

Three key nuggets from what we heard today:

  1. After points in Agius’ testimony contradicted Bob Diamond’s comments to MPs, some members of the Treasury select committee are convinced that Bob Diamond misled them
  2. Diamond will walk away with £2m in salary and cash in lieu of pension, inlcuding being paid double his contractual entitlement of six months’ notice. He has waived bonuses worth up to £20m
  3. FSA chairman Lord Turner wrote to Agius in April and told him that the regulator’s “cumulative impression” is that “Barclays has a tendency continually to seek advantage from complex structures or favourable regulatory interpretations”

12.41 Here’s a last thought from Chris Giles, the FT’s economics editor:

[blackbirdpie url="https://twitter.com/ChrisGiles_/status/222656026019762178"]

12.37 And with that, after two and a half hours in the hot seat, Agius is ejected into the Thames allowed to depart. Read more

Tom Burgis

Welcome to our live coverage of Paul Tucker’s testimony to MPs probing the Libor scandal. The deputy governor of the Bank of England faces questions about his actions at the height of the financial crisis. By Tom Burgis and Ben Fenton in London with contributions from FT correspondents. All times are London time.

19.00 That’s that for our live blog. There are three main points from Tucker’s testimony.

  1. Did Labour ministers lean on him to get banks to lower Libor in the middle of the financial Crisis, as alleged by George Osborne? “Absolutely not.”
  2. Was Libor considered an ideal measure of interbank lending, even before the rigging revelations? Nope.
  3. Is the FSA board engaged in contingency plans should Libor collapse? Yes.

Thanks for reading. See FT.com through the evening for anaylsis of Tucker’s words. Tomorrow its the turn before the committee of Marcus Agius, Barclays’ outgoing chairman. Read more

Jim Pickard

For weeks there have been rumbling tensions about the implementation of the Vickers reforms after the FT first revealed that they may not be completed until as late as 2019.

We splashed this morning on how there will indeed be no major restructuring until after the 2015 general election – after Vince Cable accepted that it would be impossible to implement such major reforms before then. (Although the legal framework will be put in place during this Parliament.)

This would reinforce the Treasury’s insistence all along that there was no major Tory-Lib Dem split over the issue.

So who was responsible for creating the impression that the Lib Dems were adamant on immediate reforms to the banking sector to split retail from investment activities?

Step forward Lord Oakeshott, former Treasury spokesman for the party in the upper chamber, who said in the Evening Standard a few weeks ago:

“What would not be acceptable is for Vickers to come out with a radical solution and then the government not to implement it immediately and in full…Every Liberal Democrat from top to bottom is united about that. It will be absolutely criticala Lib-Dem red line, bottom line, sine qua non – whatever you want to call it. That will be crunch time for the Coalition. If the Vickers Report is kicked into the long grass, it will be curtains for the Coalition.

In mid-August Oakeshott was interviewed again, this time by the FT, where he made the same point again:

Can anyone in the Treasury or the banks seriously suggest we kick Vickers’ reforms into the long grass until 2019? When Vickers reports, our

 Read more

Jim Pickard

We have done more coverage of Clegg’s proposed bank shares giveaway to 46m members of the public in tonight’s FT. The City is quite cautious about whether the whole idea is practical.

But there could be a fees bonanza if it goes ahead, with administration costs estimated at about £200m, according to some experts. Read more

Jim Pickard

Stephen Hester has warned that ring-fencing banks could create systemic risk in the system, the opposite of its desired effect. The chief executive of Royal Bank of Scotland is currently being grilled by the Treasury select committee in Portcullis House, Westminster.

The question is pertinent because some form of internal ring-fencing is the recommendation of the Independent Commission on Banking.

It was put to Hester by Andrew Tyrie, chairman of the committee, and the bank chief at first prevaricated. Put on the spot, he said his belief was that, on balance, ring-fencing would cause problems. Read more

Jim Pickard

If you haven’t seen the Barclays pay story on the front of the FT it’s worth having a read.

The co-head of Barclays Capital, who won a bonus of £9.9m for 2010, was also awarded a long-term incentive plan for that year of £3.35m. At the same time he also received £30m of shares released under prior incentive plans. Read more

There’s been some chatter in the City about David Cameron’s trip to the Gulf being part of a cunning plan to sell the taxpayer’s bank stakes. Read more

How transparent is Merlin? George Osborne says it will make London the most transparent financial centre in the world on remuneration.

But that won’t mean the public will be able to gawp at the pay packages of the top earners at Britain’s biggest banks. Watch out for Merlin’s sleight of hand. Read more

Jim Pickard

One Tory MP buttonholed me this morning to ask why the FT this morning carried a story about the donations from the Square Mile to his party. (Donations from financiers and City firms now account for more than half the £22.5m the Conservatives attracted last year.)

You should hardly be surprised by now that your readers support our party,” he observed.

Up to a point, Lord Copper. Yes, the City has always backed the Tories (with a temporary swing away during the peak of New Labour) while the unions are the cornerstone of Labour.

Plus the proportion of City money going to the Tories has actually fallen from 52 per cent in 2009 to 51 per cent last year, if you look closely at the figures in the report by the Bureau of Investigative Journalism.

But the underlying trend is still worth reporting (it’s also the splash in the Guardian) as it shows a medium-term rise in the proportion of funding from city sources – up from just 25 per cent in 2005. Read more

In opposition one of Vince Cable’s favourite pastimes was taunting Barclays and Bob Diamond, their investment banking chief. Read more

Kiran Stacey

Vince Cable faces some tough choices on getting banks to lend

Vince Cable

Government officials told the FT over the weekend that today’s bank lending paper would be “very green” – essentially laying out a set of problems rather than solutions. And so it has proved.

The first 12 out of 39 pages deal with “context”: basically facts we already knew. It is not until page 13 that we get any concrete policy suggestions. And even then, they are couched in very cautious terms. Read more

Jim Pickard

Baffled and perplexed by plans to shake up NHS - Philip Stephens in the FT
Lansley is in a hurry and may lose control - Nick Timmins in the FT
I was always thinking straight unlike some colleagues - Mandelson serialisation continues in Times
Short jail sentences are pointless – David Cameron in Daily Mail
Many Tories hate David Cameron – Tim Montgomerie at ConservativeHome
Mark Hoban mulls tax on bank profits – FT