21st May 2015
If you aint cheating, you aint trying
So Barclays has been hit with the biggest UK bank fine in history. Although top of the league, they join another six banks who between them have been fined some $6bn for a ‘stitch up’ of the foreign exchange markets.
Barclays FCA fine share is around £284m although that will soon be off to the Treasury for ‘good causes’ use and not reducing regulatory costs for the ‘good guys’ as it should.
A further $400m on it’s way to the Commodity Futures Trading Commission and $485m to New York's Department of Financial Services.
At this stage I feel a pause for breath is needed………
If ever proof was needed that banks are too big to fail and a moral compass reset is needed, this is it.
Why?
Well for a start, unbelievably, Barclays shares rose 3% after the announcement, and RBS's rose 2%, all fuelled no doubt by profuse apologies and the usual ‘blowing smoke up rear’ platitudes around putting things right with an added heavy bonus layer of remorse from Barclays boss Antony Jenkins saying “the misconduct at the core of these investigations is wholly incompatible with Barclays' purpose and values and we deeply regret that it occurred," .
Such ridiculous and frankly insincere phrases simply heap insult on all those very good regulated businesses run in a compliant, customer focused way.
If ever there was a time to see some serious regulatory action taken, ie ‘go to jail, do not pass go’ this is it.
And if ever there was a time to suspend firms from their casino banking activities for a period of time to enable reflection this is it.
In October 2013 we heard that “Sir Hector Sants is taking a leave of absence from Barclays due to exhaustion and stress and is expected to return in the New Year”. A headline that appeared at the time to get little adviser attention
Less than a month later we heard that Sir Hector had resigned after less than a year in post.
I think we may now have a better understanding of what that stress was actually all about and why he quit?
Comments (4)
What needs to be borne in mind that the people who actually pay these fines are the shareholders. That's you and me through our ISAs and Pension Funds.
You may ask why they don't fine the actual perpetrators and their managers - well in my view the answer is simple - they wouldn't raise nearly as much money - even if they made them all bankrupt. So in the end what are these fines then? Tax I think wouldn't be too far from the truth.
Rather irritating isn’t it – that when we get fined it comes straight out of our wallets. And as ever there is none of the transparency that regulators constantly berate us about. How do they assess the fine? Where does the money go?
Harry Katz 22/05/2015 10:41
An ex-banker who left because he didn't like what was going on told me the banks knew they could be fined and built the fines into their business models.
One wonders how much of the laxity given to bankers is because many senior regulatory staff come from banking and then return to it later.
Richard Brown 22/05/2015 11:39
Fines are no longer used to reduce the regulatory cost on firms who had ‘done the right thing’ so they could enable that reduction to be passed back their customers by way of lower charges. Regulatory fines are no longer about putting things right surrounding the bad behaviour of the banks toward their customers. Bank fines are simply a form of taxation, windfalls.
The FCA was obliged by statute to pay away £1.370bn of the fines the Treasury, the equivalent of 70% of alcohol and tobacco levies for 2014.
See where it went here: http://www.panaceaadviser.com/main/st10476.htm
Derek Bradley 22/05/2015 11:43
So that is proof positive - the fines are in fact tax.
Why don't the venal so and so's at Westminster admit it. They evidently now use the FCA to top up the coffers so that they can send it abroad in Foreign Aid (part of the £11 billion they waste annually).
Harry Katz 22/05/2015 18:55
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