An internal inquiry at Barclays has uprooted further damning revelations about the culture that thrived at the bank’s investment arm under Bob Diamond's leadership.
Andrew Tinney, a senior executive at Barclays Wealth who earned around £5 million per year, has resigned after it was revealed that he destroyed a damning report about the state of the bank’s investment arm.
The report, produced by consultancy firm Genesis Ventures, revealed a culture of intimidation and fear across Barclays Wealth, which is run by American Tom Kalaris.
The relentless pursuit of "revenue at all costs" meant that procedures were "actively hostile to compliance", the report found, while a culture of intimidation ensured that any dissent was silenced.
Tinney shredded the report and then denied its existence to Barclays bosses and the US central bank.
But two anonymous tip-offs to new chief executive Antony Jenkins prompted an internal investigation late last year, under the codename ‘Project Helium’, which unveiled the details of the report. Barclays notified the Financial Services Authority, which is monitoring the situation.
Clean Up Your Act, or Leave
Barclays' chief Antony Jenkins uprooted a suppressed report about failures at Barclays Wealth after launching an internal inquiry.
Just last week, Mr Jenkins wrote to his 140,000-strong staff, announcing a new code of ethics which has been designed to transform the public reputation of the scandal-struck bank. In an uncompromisingly-worded email, Mr Jenkins invited anybody not willing to comply to offer their resignation (read more).
"There might be some of you who don't feel they can fully buy in to an approach which so squarely links performance to the upholding of our values," he said.
"My message to those people is simple: Barclays is not the place for you. The rules have changed. You won't feel comfortable at Barclays and, to be frank, we won't feel comfortable with you as colleagues."
The revelations about (and from) the report imply that there could be numerous top-level employees who will pay scant regard to this new ideology.
But one of the first major decisions in Mr Jenkins’ new era of integrity and accountability will be to determine whether to reduce the bonus pool for the investment bank to absorb the fines incurred by the Libor rate-rigging scandal, as he seeks to break away from the "revenue at all costs" mentality.
First test to new mentality: will Barclays' chiefs recoup Libor losses from the investment bankers' bonus pool?
Defer Bonuses to 10 Years
The Bank of England’s executive director for financial stability, Andy Haldane, has said that bank bonuses should be deferred for up to ten years to force bankers to think about the long-term prospects of their institutions rather than short-term profiteering.
Banks are currently required to defer large pay-outs for up to five years, owing to new rules agreed by European regulators in 2011 in the aftermath of the financial crisis.
But this should be doubled, Mr Haldane told the Banking Standards Commission, as a tougher stance was needed for reckless banks.
"Three to five years is far too short to capture the cycle in credit. We had roughly a 20-year boom in the run-up to this crisis, so measuring performance only over a three or five-year window is far too short," he said.
"Progress has been made," he said on bonus regulations. "But for my money, they still fall somewhat short of the standards of prudence I would wish to see embedded."
Mr Haldane has previously backed tough ring-fencing rules, and argued that banks should not be given flexibility on how their businesses are partitioned into retail and investment arms.
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