Barclays

  • 24 Jan 2013 at 2:33 PM

Layoffs Watch ’13: Barclays

Earlier this week Barlcays promised not to dawdle when it comes to canning the 2,000 employees slated to be cut. Today employees in Asia got to experience that follow-through in action! Read more »

No more long, dragged out firings. No more dread-filled days wondering if HR is coming for you and, if so, when. If you’re a Barclays employee set to be canned, you’re getting canned A-SAP. Read more »

Earlier today, Barclays chief Anthony Jenkins sent out a memo to employees informing them that moving forward, there’d be a new way of doing things ’round the bank. Namely, that whereas during his predecessor’s tenure, manipulating interest rates and engaging in other forms of criminal activity was acceptable, such things would no longer fly. And not in a “this sort of thing is now frowned upon” way but in a “you actually can’t do this anymore/if that presents a problem for you than clean out your desk and leave” way.

Aware that change can be very difficult, that it often causes great anxiety, and that many resist it entirely, Jenkins used 1,479 words to get his message across, acknowledging that not all employees will be willing to sign on board re: acting “fairly, ethically and honestly,” rather than simply writing: “Hey, we have a new policy called ‘not doing illegal shit.’ It’s a little unorthodox and it may not be for everyone, so please take some time to think it over.” Read more »

I assume that there’s someone somewhere whose job it is to think about this, but the big Libor fine that appears to be in UBS’s future got me wondering: how do they decide how big these fines are supposed to be? In most fraud cases you can tot up how much someone stole and use that as a starting point, inflating or deflating it for different levels of evil or remorse. But that doesn’t seem to be a promising avenue in Liborgate, where the money involved is hard to calculate and mostly flowed around the manipulating banks without touching them directly. The fine-setters seem to have about four things to think about:

  • how much bad stuff did the bank do,
  • how much money did they make doing it,
  • how caught are they, and
  • how sorry are they now.

On how much bad stuff … really the point of these settlements is that you’ll never quite know. The Barclays settlement documents contain tons of delightful emails, but they’re framed by the usual prosecutorial boasting that they are “just some examples of the numerous trader requests over the years in question.” They’re a sampling thrown in for scandalous effect, not a real accounting of Barclays’ rate manipulation. For the CFTC to actually publish every instance that it discovered of rate-fixing, in a settlement, would be silly. For one thing, the settlement is designed to avoid the necessity of doing the work to get such an accounting. For another, the settlement is designed to avoid the public release of such an accounting, which would be ammunition for the private lawsuits that have sprung up around Libor.

So we’re unlikely to get a real official read on whether UBS was worse than Barclays and by how much. But the fine is obviously a clue that they were pretty bad. From David Merkel’s data they actually seem to have been middle-of-the-pack as a Libor submitter, without the extreme submissions and big swings that Barclays had. But to be fair that is in 3-month USD and part of UBS’s thing seems to have been manipulating Libor in more tenors and currencies than Barclays did. Read more »

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 »