Barclays

Earlier this month, it was reported that Barclays’ investment bank chief Rich Ricci was working on a little something called Project Mango,* which is similar to Bank of America’s Project New BAC in that one aspect of it involves firing a bunch of people, as part of a plan to revamp the unit. According to the Journal, management is now putting the finishing touches on Project M and all that is left to decide is whether cutting 2,000 IBD jobs is enough or if they should think bigger. Read more »

The best way to read this Journal article about how a bunch of banks manipulated Euribor may be: while whistling the theme from The Great Escape:

The goal was for Euribor to be manipulation-proof. … Instead of asking each bank how much it would cost it to borrow from a fellow bank, Euribor was based on a different query: How much would it cost a theoretical “prime bank” to borrow? By making the question theoretical, the EBF tried to remove the risk that a bank would deliberately understate its borrowing costs in an attempt to conceal its financial problems …

THEY SAID IT COULD NOT BE MANIPULATED, BUT ONE MAN MANIPULATED IT ANYWAY. Or a lot of men, and some women. Really pretty much everybody it seems like:

The European Union is expected soon to accuse multiple banks of attempted collusion in the setting of Euribor, according to people briefed on the probe. Barclays PLC has already acknowledged trying to rig the rate, and other banks are likely to be pressed by regulators in the U.S., U.K. and elsewhere into similar admissions, according to industry and regulatory officials. … At least a dozen banks are under investigation, at least four of them for allegedly working with Barclays, according to disclosures by banks and regulators.

My favorite thing about Euribor’s “manipulation-proofing” – which besides the “hypothetical-bank” thing also includes asking a bunch of banks so no one bank has too much influence – is that, while it perhaps reduces the likelihood of manipulation, it greatly reduces the likelihood of proving manipulation. You could see how this would be appealing to a regulator. “Our benchmark is perfect,” you say, “there’s never been a single proven instance of manipulation!” Plus since no facts can ever falsify a Euribor submission, you never have to work that hard to investigate them. Read more »

  • 03 Dec 2012 at 7:33 PM

Layoffs Watch ’12: Barclays

Remember when Bank of America said it was working on a little something called “Project New BAC,” and it involved firing a whole bunch of employees? Barclays is apparently working on a coupla “projects” of its own. Read more »

  • 26 Nov 2012 at 10:33 AM
  • Banks

Qatar Holdings Sells Its Barclays Warrants, Sort Of

Is there a better word in the English language than “monetize”?1 When you have a thing, and you would rather have money than that thing, you have about two choices, which are:

  • sell the thing, or
  • monetize the thing.

Choice one is straightforward and boring; choice two has the advantage of a wholly indeterminate meaning, plus sometimes you get your money and get to keep the thing. Anyway what happened here?

Qatar has cashed in its remaining warrants in Britain’s Barclays Plc, a move that should yield a $280 million profit and still leaves the sovereign wealth fund as the bank’s top shareholder following a controversial fundraising in 2008.

Deutsche Bank AG and Goldman Sachs Group Inc said they would sell up to 303.3 million shares – worth 740 million pounds – to comply with Qatar’s request. They sold shares at 244 pence apiece, a 4 percent discount to Friday’s closing share price, but did not confirm whether all the shares had been sold.

Qatar Holding said in a separate statement late on Sunday it had monetized its remaining holding of 379 million units of Barclays warrants – instruments that convert into shares – without affecting its 6.65 percent stake.

The warrants have not yet been converted, but can do so at 198 pence per share in the next year, which would reap a 180 million pound profit at current prices.

Notice: Read more »

Have you ever had construction going on nearby your home? Was it loud? Annoying? Did keep it keep you up in the middle of the night? Did you seriously consider opening your window and screaming “Hey! Shut the hell up down there!” or even confronting the people making all that racket face to face? Olivier Desbarres can relate. Or at least he can half relate. Because while most of you were probably talked out of making some sort of scene, either by your significant other or your own impulse control, on October 20th Desbarres decided to go in another direction, the one that involved introducing himself to the construction workers building a house near his own by screaming, “I’m gonna go after you, I will haunt you, I’m gonna burn your fucking house down, I will find your fucking family,” a task he noted would be fairly simple and straightforward (“I can find [them] very easily,” he explained, “I’m a man with resources”), in case there were doubts (a fairly reasonable concern, as there are a lot of people in Singapore and how were these guys supposed to know he had an army of Barclays researchers at his disposal?).

Still worried that the group wasn’t taking his threats seriously on account of the casual look he was sporting that morning– shorts and sandals– Desbarres then picked up some sheet metal and launched it in their direction, presumably to demonstrate he meant business.* Although that would have been a good time to make his exit, at that point Desbarres noticed that one of the men had been recording him without his consent, leading to: Read more »

  • 01 Nov 2012 at 2:07 PM

Barclays Did Plenty Of Non-Libor Manipulating Too

What can we make of this Barclays FERC thing? Besides, like, ha ha ha Barclays you sure like manipulating things? Quick version is: the Federal Energy Regulatory Commission has proposed to fine Barclays $470mm for manipulating California electricity markets by uneconomically buying/selling spot physical electricity in order to manipulate up/down the settlement prices it received on its electricity swaps. Barclays disagrees, etc. You can find the FERC order if you look hard enough1 and I am not an energy-trading guy and I will tell you: I found it entirely incomprehensible! So there’s that.

One quick and obvious thing to make of all this is: remember how one problem with Libor is that, though it underlies zillions of dollars of real economic activity (mostly swaps and stuff, some loans), Libor itself has for years been a nearly purely made-up number, not based on any actual transactions, so you can magically manipulate Libor by just pointing and saying “I MANIPULATE THEE”? That is not true of, God, some sort of electricity price or something: Read more »

  • 19 Oct 2012 at 6:26 PM

Layoffs Watch ’12: Barclays

Cuts are said to have gone down with more a-comin’. Read more »