Barclays A New Dawn

English: Barclay's Bank, Jerusalem, circa 1940.

English: Barclay’s Bank, Jerusalem, circa 1940. (Photo credit: Wikipedia)

Barclay’s has a new centurion: David Walker will take over from Marcus Agius as Barclay’s chairman on November 1. Walker is a former regulator who served in the UK Treasury and Bank of England. That background will give Walker’s credibility as he tries to overhaul the bank’s culture, operations and reputation in the wake of the Libor scandal.

As lead author of the eponymous 2009 report on corporate governance at UK banks, Walker has already committed to the standards he – and other board members – should act on:

The most critical need is for an environment in which effective challenge of the executive is expected and achieved in the boardroom before decisions are taken on major risk and strategic issues. For this to be achieved will require close attention to board composition to ensure the right mix of both financial industry capability and critical perspective from high-level experience in other major business. It will also require a materially increased time commitment from non-executive directors … In all of this, the role of the chairman is paramount, calling for both exceptional board leadership skills and ability to get confidently and competently to grips with major strategic issues. With so real an expectation and obligation, the chairman’s role will involve a priority of commitment that will leave little time for other business activity.

So far, Walker is following his own advice by committing to work a minimum of four days a week as chairman. Anything short of full-time may sound slight, but none of his peers have made their time commitment similarly transparent nor can credibly argue that theirs is greater. For that work, he’ll receive £750,000 ($1.17 million), of which £100,000 will be in Barclay’s stock.

Additional transparency may be coming to Barclay’s in other forms, as well: the Walker report called for disclosure of the number of employees earning more than £1 million in salary and bonus and a tally of those “earning between £1m and £2.5m; £2.5m and £5m; and over £5m”. Walker also called for the head of the board’s pay committee to automatically face re-election if their proposals are supported by less than 75% of shareholders.

Walker also thinks boards should hear directly from risk officers, and should have final say over their hiring and firing. He wants the chief risk officer to report to other executives, but the CRO also “should report to the board risk committee, with direct access to the chairman of the committee”.

These and Walker’s many other recommendations add up to a view of the relationship between the chairman and the CEO at financial institutions very different from what we’ve recently seen. UK board oversight is more rigorous than in the US, and the chairman and CEO roles are invariably separate.  It’s hard to imagine Jamie Dimon working under Walker’s structure. In Walker’s view, chief executives cannot be allowed to become indispensable or inscrutable: “If the embedding of authority… makes the CEO become effectively unchallengeable (and possibly a control freak), the CEO will be a major source of risk and will probably need to be removed”. That should make for some interesting interviews as Walker takes up his first prominent task, finding a new CEO.

#bank-of-england, #barclays, #chief-executive-officer, #david-alan-walker-banker, #hm-treasury, #list-of-banks-in-the-united-kingdom, #marcus-agius, #walker

Euro Zone Market News

German Logo of the ECB.

German Logo of the ECB. (Photo credit: Wikipedia)

Fiscal policy

Fiscal policy (Photo credit: Wikipedia)

Market News and Views

The FTSE 100 is called to open higher this morning after the performances on Wall Street and in Asia overnight after supportive comments from German Chancellor Angela Merkel on the European Central Bank‘s plans to help the euro zone debt situation. She also called for swift integration of fiscal policy in Europe adding that time was running short. There is no important UK economic data due out today so attention will focus on the release of the preliminary reading of the University of Michigan Consumer Sentiment Index this afternoon in the US. Commodity prices are mixed in trading and on the foreign exchanges, the major currencies are range bound with the dollar edging slightly higher.

So on the face of it we are going to get this mess finally sorted! Even though this belies one truth that is hidden, any fiscal policy will only work with growth! The sheer fact that for the last 4 years in real terms growth has eluded the world, apart from parts of Asia and especially China! Even though they are starting to feel the draft of their economy starting to chill!

My personal view is that very soon the European Central Bank will have to act to shore things up but this only puts of the fateful day, when a reckoning will be needed! This is closer than we think but further from our minds than we care to admit!

#angela-merkel, #asia, #chancellor-of-germany, #european-central-bank, #fiscal-policy, #ftse-100-index, #university-of-michigan-consumer-sentiment-index, #wall-street

Who Is Really Responsible For The Libor Scandal

Who Is Really Responsible For The Libor Scandal

This report issue by the ” Treasury Committee” makes for interesting reading if you have the time! It shows how contradiction after contradiction of evidence given was so easily made to be misinterpreted by the three parties! In their own words and as this extract shows ,we could be led to believe that no one person was responsible or that everyone was aware and thus was responsible!

EXTRACT:

The evidence that Mr Tucker, Mr Diamond and Mr del Missier separately gave about this manipulation describes a combination of circumstances which would excuse all the participants from the charge of deliberate wrongdoing. If they are all to be believed, an extraordinary, but conceivably plausible, series of miscommunications occurred.

This was unambiguous to say the least and told us nothing more than we already did not know!

Personally l believe the connection goes back a lot further and a lot more must be revealed before we are able to know, where it started.          

#banking, #barclays, #libor, #report, #treasury-committee