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Barclays bosses face fresh Libor scrutiny

by Daniel Grote on Jan 25, 2013 at 08:50

Barclays bosses face fresh Libor scrutiny

The High Court has heard email evidence suggesting top Barclays executives knew the bank was manipulating the Libor rate in November 2007, almost a year earlier than previously disclosed, according to reports.

Emails were read out in the High Court yesterday as part of the first British damages claim over Libor manipulation.

One, written in November 2007 in response to dollar-Libor submitter Peter Johnson’s concerns about the rate-setting process, said: ‘Guidance, if you can call it that, from the 31st floor is what we don’t stick our head above the parapet in any circumstance.’

The 31st floor is understood to refer to Barclays senior management, who had offices on that level of the bank’s Canary Wharf headquarters.

The claims follow judge Justice Flaux’s rejection of bids for anonymity from 106 current and former Barclays employees involved in the case. They include former chief executive Bob Diamond and former chief operating officer Jerry del Missier.

The case is being brought by investors, including Guardian Care Homes, alleging the bank mis-sold them interest-rate swaps pegged to the manipulated rate.

23 comments so far. Why not have your say?

Richard via mobile

Jan 25, 2013 at 09:06

Is there no end to their shame? Still, I'm sure Sir Hector will negotiate another discounted speeding fine

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*****

Jan 25, 2013 at 09:11

Do not speculate before you know the facts!!!

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John Smyth 3

Jan 25, 2013 at 09:15

Very! very! cosy wasn't it. Barclays senior management on the 32nd floor of Canary Wharf and the FSA below or above them and their placeman Hector running the FSA.

Looks as if Hector Sants will not even have to change his working location except for the floor his new office will be on.

If you read this in a work of fiction or a history book you would not believe that corruption on this scale could happen in this country. It demonstrates yet again that the banks run this country and that our politicians are either stupid, corrupt or both and we the public are powerless to stop it. The media and politicians then wonder why many people do not bother voting.

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*****

Jan 25, 2013 at 09:26

However you clearly believe whatever the media tells you…. people are just looking for someone to blame and Barclays is now an easy target. That doesn’t mean any of what the media is saying is true. Step back and look at the bigger picture if management are as bad as people say surely more staff would come out and sell a sob story but they don’t.

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complacency rules

Jan 25, 2013 at 09:28

Over the last week or so there have been a few articles in the financial press seeking to either excuse or rehabiiitate the Bankers and Hector. I appreciate that these are allegations at this stage and have yet to be proved. Nevertheless the FSA had these names, the FSA as well as Barclays did not want them published, the Chief of the FSA subsequently gets a very well paid position with Barclays. Need I say more!

Incidentally, some of the reports say that Bob Diamond was party to these discussions (again only an allegation) but if subsequently shown to be correct then clearly contradicts his statement to the Treasury Select Committee that he only recently became aware of the LIBOR fraud.

I suggest that thee are no more apologist articles for the Bankers or for Hector until all the facts are uncovered, including the real reason for his knighthood.

The smells are getting stronger and stronger. The true cause of the stench needs to be uncovered and dealt with properly, not just applying some Fabreze and hope that no one notices that the stink is still there.

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*****

Jan 25, 2013 at 09:37

Why focus so much on Barclays.....http://www.guardian.co.uk/business/2013/jan/20/rbs-awaits-fines-libor-rigging

Think about the banks part owned by the tax payer surely that is worse!!!!!!!

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complacency rules

Jan 25, 2013 at 09:38

@*****

'Do not speculate until you know the facts'. This seems a silly comment to me. Until all the facts come out speculation is all that is available. The problem is that the facts are being with held and covered up. The FSA knew these names and yet declined to produce them. The names only became known as a result of legal action. If the banks are genuinely wnating to chnage their culture voluntarily bring everything out into the open, only then will speculation stop. In the meantime, based on what is known, there are clearly grounds for further investigations including why no criminal proceeding are taking place for what can only be described as fraud over LIBOR.

I for one will gladly stop speculating once everying is out in the open.

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Richard via mobile

Jan 25, 2013 at 09:53

It's not surprising people are tempted to write the script based on Barclays' track record, now, is it?

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*****

Jan 25, 2013 at 09:55

@ Complacency rules

Do you actually understand the LIBOR scandal’s details??

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complacency rules

Jan 25, 2013 at 10:21

@*****

I do not claim to have investigated every detail of this matter but I do understand that Barclays and others were deliberatley producing misleading figures. I understand that Barclays got fined for this, that their chairman and CEO (and others) resigned as a result and had to forego bonuses etc. I understand that other financial institutions are involved and have faced or likely to face bigger fines than Barclays. There are also reports that the USA authorities are looking into criminal proceedings. I also understand that Barclays have been fined for multiple other matters. The nature of the culture within Barclays is apparent, the only question seems to be the extent of it. We cannot excuse Barclays because other institutions were doing the same thing.

My real concern is that we have only seen the tip of the iceberg at the moment, and virtually with every passing day the revelations (and I do appreciate that these have yet all to be proved) indicate that the tip is getting bigger and bigger.

Yes other institutions were involved, and no doubt they will all get their turn, but Barclays are the ones in court at the moment, and Barclays are the one paying a huge salary to the person who was supposedly regulating them.

I feel jthere are justifiable grounds for my speculations but will gladly change/rescind them when the facts are finally prised out. It is just a shame that legal screwdrivers have to be used rather than Barclays volunteering the information as part of their so-called culture change.

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Hickky

Jan 25, 2013 at 11:05

If you don't think abuse, given a nod and a wink by senior management, occurred in almost all other major banks involved in LIBOR rate setting, you probably don't understand the rot that predailed in the worldwide banking system. LIBOR was like a gentlemans club when there were people with an honest set of morals in charge. But the globalisation of the British banks produced an influx of overseas personnel, together with their different attitudes and ethics which gave a shot in the arm to our banks in terms of scope and profitability, but lacked the morals of the previous encumbants. Unfortunately the regulators had no idea this was going on, believing a set of standards were still in place, although Hector, having worked for UBS, Credit Suisse etc and a degree in philosophy, should have known about this step change.

Thus arose the aggressive banker like Fred Goodwin and his contempories, who loved to place lots of pressure on his staff to perform or face the chop.

John Varley was a brilliant negotiator but under his watch senior executives were nearly all Americans, with pressures like never before eminating from the top floor. That's when I left, the bank I joined ceased to have the same morals and ethics and We were encouraged to sell products that were not in the client's interests, but Barclays.

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John Smyth 3

Jan 25, 2013 at 11:55

@*****

You are coming across as a public relations person for Barclays. Are you?

The reason more staff do not come out and sell their stories is because the history of whistle blowing against large corporations is not a good one whether in this country or any other. Employees fear for their careers, livelyhoods, mortgages, pensions, etc. Recall what happened to a Mr Moore of RBS who was sacked and paid to keep his mouth shut. He was only able to go public after RBS's balloon burst. I know several Barclays employees and ex-employees who live or have lived in fear of their employer.

You advise us to think of the part taxpayer owned banks involvement which is worse. We are not naive enough to ignore them thank you. They are all miscreants. Barclays is only not part owned by the tax payer because it scuttled off to the middle east to get it's bail-out money because they did not like the terms attached to taxpayer money. They did and do however benefit greatly from the cheap treasury or Bank of England money made available to all the banks.

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Blue Eyed Monster

Jan 25, 2013 at 12:33

@hickky

An interesting concept - that it was the influx of jonnie foreigner that brought down the moral standards withing the banking sector.

So what brought down the moral standards leading to corruption in government, the civil service, the police, etc?

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Usually found sitting on the fence

Jan 25, 2013 at 12:39

@ ***** - I don't think I actually understand the LIBOR scandal’s details, would you be able to explain it to me?

@ John Smyth 3 - I think a Barclays public relations person would be ashamed of the comments made by *****. Firstly, the media are informing the public about an email read out in court and the inference that goes with the email. A little hard for the media to make that up! Secondly ***** suggests that not everything in the media is true, then points us in the direction of other banks... suggesting heavily that they too were part of the problem, which apparently may all be a media lie.

Without all the facts out in the open, it is easy to make assumptions and to believe the opinions of experienced Journalists. Personally, it would not surprise me to hear the problem is much wider, much darker and more worrying than we are being informed. Afterall, it's in everyone's best interest for the banking sector not to collapse, not necessarily for their own personal benefit, but for the ongoing confidence in general.

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*****

Jan 25, 2013 at 12:48

No I am not a PR person for Barclays I can just see the injustice and want to stand up for them.

Unlike everyone else who just seems to take what the media says and use it as another reason to hate banks. I know many people that work for Barclays and they do NOT fear management and they never have because the culture within the company is not how the media would have you believe. Clients do come first and staff are constantly reminded of this so if individuals take it upon themselves to deviate from this can the whole company be blamed for this….?

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Hickky

Jan 25, 2013 at 13:13

@Blue E M

I can't answer for the civil service, police etc. as I never worked for them. But I did work for Barclays, and I found the influx of sales at all costs co-incided with the employment of Americans in senior posts. That is not to say there were no parachuted in UK sales managers who were not just as ruthless, but they had their big bonus structure to protect. In the past sales managers could earn a small bonus but their salary was their main form of income. Then the 100%+ bonuses came in and the anti customer attitudes commenced. The US influence could be heard throughout. Maybe it was just a co-incidence, and a new generation without a moral compass gained control in a number of spheres of influence. But I'll stick to my theory!

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Hickky

Jan 25, 2013 at 13:28

@*****

I know many people that used to work for Barclays and they did fear management because the culture within the company was how the media would had you believe. They were not the only ones, probably not even the worst miscreants.

Certainly I have seen evidence of an attempt to put clients needs first in my bank (not Barclays) by via an attempt to sell higher interest bearing accounts, often term deposits, to elderley customers. Only yesterday I overheard a member of staff saying 'Mr*****, you have over £1,000 in your current account, that is far too much, let me transfer it into our **** account, you will earn double the interest there'. Mr***** says, no don't bother, I intend to spend it shortly. Staff: don't worry, when you need it you can always pop in, or transfer it on-line. 'Why don't you wait to see our adviser in the office'. Cuistomer walked poorly with a stick, didn't seem to have any understanding of on-line and was 90 at minimum. Sounds like putting the bank's targets first still! Not Barclays, but I bet they felt the clients was put first on their tick box.

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John Smyth 3

Jan 25, 2013 at 13:56

@*****

Was all the mis-selling of PPI, bonds and a few other things just a few people deviating? I think not.

I like you know a few Barclays employees and ex-employees. One is my wife's cousin who has resigned because he did not want to live with their imposed sales pressure targets and is going through a tribunal hearing. His father before him took early retirement for the same reason. A man my wife met while out walking the dog one day told her that he took early retirement from being a Barclays bank manager because his conscience would not let him sell what the bank wanted him to do to customers who did not want or need the products. He described it as being asked to participate in criminal activity.

Nobody believes that it is just Barclays. All the banks are similar. Nor are we naive enough to believe that all employees of Barclays or any other banks are other than decent hard working people doing good jobs. But the greed and culture from the top forces many into corruption.

People are not just believing what the media put out. PPI mis-selling and the other things they have been fined for are not media creations. They were fraud.

Please save your sword of justice for some more worthy people or organisations. I think it was Jonathan aitkin whom famously spoke of his sword of justice and we all know where he ended up.

Might I be right in thinking that the reason you do not use your name on this blog is because you are fearful of what your employer might think?

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complacency rules

Jan 25, 2013 at 13:58

@*****

if individuals take it upon themselves to deviate from this can the whole company be blamed for this….?

How many individuals have to deviate from Barclays supposed standards to create a multi billion compensation payout for PPI? Does the Chairman and the CEO (and others) resign because of the actions of a few indviduals? Do you want more examples because there are lots of them across the whole banking industry.

Is @**** really Bob Diamond or perhaps Hector himself?

Incidentally, I used to work for Barclays but left in the late 90's. Staff were put under pressure to achieve targets. Whilst they may not have feared their Managers there was always the underlying threat that they may not keep their jobs. This underlying threat went all the way through the hierarchy and I suspect that it just got worse.

Annual appraisals were essentially based on whether income targets were met, not on customer service.

That was and probably still is Barclays culture: make big profits or go. The new chap Jenkins may be making noises about changing the culture but he was the top man at Barclaycard when they were selling their own version of PPI.

The more people say things change the more they stay the same.

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Blue Eyed Monster

Jan 25, 2013 at 14:13

@Hickky

It seems to me you are saying the banks won't rid themselves of the moral corruption while they continue to employ americans?

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Anthony Smith

Jan 25, 2013 at 14:45

People don't speak out because they are afraid of not only their own job but their future in the industry. You must have seen the recent story about Government black lists. Those that do speak out are generally not paid a penny for selling their 'sob story' - it's all about integrity - something deeply lacking in this sad affair.

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Hickky

Jan 25, 2013 at 15:02

@ BEM

It is not the fact they were American, rather that they imported an american culture with them. Look at Lehmans under Dick Fuld and you know what I mean. The trouble with this high pressure culture is that in the US, if you transgress the rules you stand a good chance of going to jail. Over this side of the pond you were unlucky if you got your wrist slapped. None of the wunch of bankers that presided over the LIBOR scandal, the PPI misselling and others will go to jail. A fine for the bank, but if they can't pay it we will reduce the fine 'cause we don't want to make any impact on your credit rating.

Americans are generally honest, hardworking, upstanding people, however the rampant capitalism practiced in NYC often does not translate to the softer european sensibilities. By all means employ Americans if they have a visa, but sometimes their enthusiasm needs tempering.

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Usually found sitting on the fence

Jan 25, 2013 at 15:05

Plus Anthony Smith, how much will the sob story be worth in comparison to the salary and bonuses of those most likely to know, understand and likely to have the authority to speak out? Perhaps Oprah could invite some bankers onto her show to get some things off their chest, or to put the record straight...

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