Articles

Articles published in FT unless otherwise stated.

  • The Barclays case is rooted in the bank’s long-held ambitions

    The origins of Barclays’ prosecution by the UK’s Serious Fraud Office lie not in 2008, when the fundraising at the centre of the case actually occurred, but more than 30 years ago when it embarked on its mission to become a universal bank. That mission has defined Barclays’ corporate history ever since, directly or indirectly costing more than one chief Continue Reading

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  • Corporate scandals demand boardroom shake-up

    They are trained for men’s jobs on RAF stations at home and abroad: any sort of job except flying or navigating a plane.” These words about the Women’s Royal Air Force from a 1960 Rank Organisation newsreel sound absurd today but we should not be too smug. Prejudice of many different kinds still exists in the workplace, where most leading Continue Reading

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  • Mark Carney has to set the highest standards for Britain’s banks

    “Everyone in a firm needs to see that executives and board members live up to what they say they are trying to do. Actions speak louder than words.” This was Colette Bowe, chair of the Banking Standards Board, an industry organisation established in Britain in 2015 on the recommendation of a parliamentary commission. Its aim is to raise standards of Continue Reading

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  • The trouble with ‘free’ banking for challenger lenders

    No one likes us, we don’t care” sing the supporters of Millwall, the unfashionable south-east London football club. Across the river Thames in Canary Wharf, where many of the UK’s largest banks have their head offices, retail bankers have been quietly whistling the same tune for years. Their profession consistently ranks among the least admired, least trusted in British consumer Continue Reading

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  • Barclays’ gamble in holding out against a DoJ settlement

    Four years after it became the first bank to settle with the US authorities for rigging the London interbank offered rate, a decision that rebounded against it, Barclays has taken a different line over allegations of mis-selling mortgage-backed securities. While other banks have agreed settlements with the US Department of Justice in respect of these instruments sold before the 2008 Continue Reading

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  • Brexit is a chance to do the ‘Big Bang’ better

    Thirty years on, the planning of the biggest shake-up of the City of London in centuries looks oddly chaotic. Cecil Parkinson, the secretary of state for trade and industry, had to resign in a sex scandal weeks after reaching agreement with the stock exchange. His successor Norman Tebbit described the reforms as “heaving a massive brick into the once tranquil Continue Reading

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  • Theresa May needs to take shareholders with her

    In her last major speech before entering Number 10 as prime minister, Theresa May eerily echoed remarks made by the former Labour premier Tony Blair 20 years earlier: “Transient shareholders are not the only people with an interest when firms are sold or closed,” she said. “Workers have a stake, local communities have a stake, and often the whole country has Continue Reading

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  • Lenders at the last

    Before the crisis of 2007-08, the general public rarely considered central banks and that was the way central bankers liked it. The less they were in the headlines, the better: if the global economy was working well enough to be considered boring, they were doing their job. Then the banking system collapsed and the central banks had to come out Continue Reading

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  • Too many boardrooms display a ‘conspiracy against the public’

    On a cool May morning in 2006 a group of garishly dressed people preceded by a small camel paraded across London’s Clapham Common. They carried placards bearing a quotation from Matthew 19:24: “Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of Continue Reading

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  • Barclays’ African sale shows decline of universal banking model

    Barclays announced last week that it intends to sell its African operations. The emergence of Bob Diamond, the bank’s former chief executive, as a possible buyer raises the question of which bits of its business it should be cutting. Mr Diamond, who took control of Barclays Capital in 1996, started Atlas Mara, an African banking venture, after he resigned as Continue Reading

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  • The London Stock Exchange will thrive if it looks forward.

    When it was first mooted in 2000, the idea of a takeover of the London Stock Exchange by its German competitor Deutsche Börse was hotly debated. At the time, Frankfurt and Paris had live and officially supported plans to challenge London as Europe’s financial centre. Public stock exchanges were important features of the financial landscape and it mattered who owned Continue Reading

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  • The choice of Barclays’ new broom

    It took an American, Bob Diamond, to make a viable business out of Barclays’ investment bank, and it is a telling comment on the shallow pool of British banking management that Barclays has now turned to another American, Jes Staley, to lead it in the post-crisis era. But whereas Mr Diamond’s job when he joined Barclays nearly 20 years ago Continue Reading

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  • Libor trial: Have we cleaned up the financial markets? (Published with the BBC)

    Whenever people of the same trade meet together, wrote the Scottish economist Adam Smith in 1776 in his great work The Wealth of Nations, "the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." The 2015 trial and conviction of Tom Hayes for conspiracy to manipulate the Libor markets reveals a modern day electronically Continue Reading

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  • Barclays and Britain wave goodbye to the big time

    The final curtain is about to come down on one of the City’s of London’s longest running shows. Ever since Big Bang in 1986, when deregulation opened up access to securities markets, the attempts of British banks to compete with the leading Wall Street houses have created a compelling spectacle full of big bets, ruined reputations, and fortunes won and Continue Reading

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  • The Edge: Investment Banks and Information Flows in Public Markets (published with PERC)

    If there was any benefit from the recent banking crisis and great recession, it was to increase public knowledge of financial markets. The world learned the hard way about bankers’ greed and incompetence and began to understand the power conferred by the market information they possess. The collapse of the US investment bank Lehman Brothers in 2008 and the disastrous Continue Reading

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  • Big choices for Barclays as Jenkins goes

    The time for remorse and apology is over, Bob Diamond, Barclays chief executive at the time, famously told a parliamentary committee in 2011. It was a premature claim that probably played a part in his departure the following year. But the ritual slaughter of his conservative successor, Antony Jenkins, and Barclays’ apparent search for a more aggressive leader, suggests that Continue Reading

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  • The precarious prospects of London finance

    It was 2006, and the City of London was enjoying an extraordinary surge, capturing market share and kudos from its global competitors. If you worked in financial services, London was the place to be. US investment banks, upset by the strict regulations imposed on their industry by the Sarbanes-Oxley Act, were moving senior staff to London and some briefed they might move Continue Reading

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  • Technology will liberate customers from bad banking

    The trouble with writing rules is that they can quickly be overtaken by technological change. In 1907, The Hague Peace Conference solemnly prohibited the discharge of missiles from balloons; the first flight of a military aeroplane took place a year later. In its attempt to oversee the more mundane battlefield of Britain’s banking market, the country’s antitrust regulator needs to Continue Reading

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  • HSBC’s tough week (published with Prospect Magazine)

    It had already been a long day for Stuart Gulliver, HSBC’s chief executive. Having spent the previous week explaining that the HSBC’s Swiss private bank was no longer a “go to” place for dodgy tax evaders, he had woken on Monday morning to headlines revealing that he had once held an account there himself as the beneficial owner of a Continue Reading

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  • Travails of HSBC are a microcosm of problems in banking

    It was the summer of 2007 and I wanted to open a bank account. Passport and utility bill in hand, I went to my local HSBC branch. The staff scrutinised both items carefully, fixed me in the eye and declared that the utility bill was out of date. I glared back at them, argued in vain and returned an hour Continue Reading

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  • For markets there is such a thing as too much information

    Two very different companies made significant announcements last week. National Grid, the UK utility company, said it would no longer issue formal quarterly reports — an important piece of news for its investors, who took it in their stride. The next day, Apple gave its regular quarterly update. Investors sent the company’s share price soaring after learning that strong holiday sales pushed it to the Continue Reading

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  • Bankers, like alcoholics, must first admit they have a problem

    They really can’t help it, can they? Like alcoholics in a liquor store, the investment banks cannot resist an illicit swig whenever they think nobody is looking. That is the conclusion from the fines imposed on 10 US investment banks last week for breaking the rules designed to manage conflicts of interest in initial public offerings. The shock is that the event Continue Reading

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  • The forex debacle – a scandal to end all scandals

    The penny, or whatever currency has just been rigged, may finally have dropped. Prime responsibility for rigging the foreign exchange markets rests with the coterie of dealers who were directly involved. But no one emerges unblemished. Professional traders smart enough to have worked their way into top positions at some of the world’s leading financial institutions were perfectly capable of understanding that Continue Reading

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  • How the forex scandal happened (Published with BBC)

    The foreign exchange, or forex, market is a virtual trading place where dealers buy and sell currencies. Deals at today's price are called the "spot" market and bets can also be made on forward exchange rates. In all, $5.3 trillion (£3.3tn) was traded per day on the forex markets in 2013, according to the Bank for International Settlements. To put Continue Reading

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  • UK banks should have fewer complaints about more compliance

    Seven years after the onset of the financial crisis, banking reform is in a new phase as regulators tackle the industry’s structure and behaviour. The process has left banking leaders searching for the right response as they reassess their commercial interests. And finding the right tone is proving problematic. This is especially true for banks operating in the UK, which face Continue Reading

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  • What if… Big Bang hadn’t happened? (published with Prospect Magazine)

    It was cosy, clubby and under-capitalised. The City before Big Bang needed a rocket, and it got one from the reforms that took effect in October 1986. The centrepiece was the American model in which banks were permitted to own stock exchange firms, smashing the centuries-old City tradition that kept apart banking, investment advice and share trading. Suitably encouraged, the Continue Reading

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  • The Establishment: And How They Get Away With It’, by Owen Jones

    Sixty years ago, in August 1954, two young writers were passing the Royal Academy in a London taxi. One of them, Hugh Thomas, later to become an internationally recognised historian, chair of a centre-right think-tank and a member of the House of Lords, mentioned to his companion, Paul Johnson, a distinguished pundit in the making, a newly fashionable idea among Continue Reading

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  • Britain versus the banks

    In a 1975 foreword to his classic study of Wall Street, The Great Crash 1929, the economist JK Galbraith cautioned readers over the dangers of forgetting. “There is merit in keeping alive the memory of those days”, he wrote. “For it is neither public regulation nor the improving moral tone of corporate promoters, brokers, customer’s men, market operators, bankers and Continue Reading

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  • The decline and fall of British investment banking

    Britain first lost its seat at the top table of investment banking on January 9, 1995. That was the day SG Warburg announced the closure of its international bond activities to focus on equity, advisory and UK debt. It was a stunning retreat, ending the global ambitions of what was then the UK’s premier investment bank. Staff left and clients questioned Continue Reading

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  • Barclays’ bonuses give the City a say on banking values

    If the bank wants to stay in the big league it has to pay competitively or quit, says Philip Augar Reflecting on a testy question-and-answer session with a gathering of disgruntled bankers from his company’s underperforming investment banking division, the Barclays chief executive recalled: “The first question was about bonuses. I said that we had to balance market forces with the fact Continue Reading

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  • Structural change is the answer to the problem of bankers’ bonuses

    Regulators must act to open up pay in finance to conventional market forces, says Philip Augar It is bonus time in the City of London. This annual ritual used to be about bankers, brokers and traders positioning themselves for a life-changing payout. But since the crash, the payouts are smaller and the actors have another role, which involves dodging the bullets from Continue Reading

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  • The Co-op Bank’s collapse was all too avoidable

    Bad management, naive governance and sloppy regulation are again to blame, says Philip Augar “How did things ever get so far? I don’t know. It was so unfortunate, so unnecessary.” The question Don Corleone asked the heads of the five families in The Godfather might be asked by the board, management and regulators of the Co-operative Bank, currently enduring humiliation, disgrace and embarrassment. Continue Reading

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  • Rail to Royal Mail: the dangers of flawed privatisations

    Intervention addresses the symptoms but not the causes of malfunctioning, writes Philip Augar Is the UK’s privatised utilities market broken? It is a fair question in the week when Royal Mail – once seen as an untouchable public asset – makes its stock market debut, when Ed Miliband, Labour party leader, finds public resonance with the idea of a price freeze in the Continue Reading

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  • Reckless banking should be a criminal offence

    Many banks would still be around if their chiefs had faced prosecution, writes Philip Augar its causes and consequences laid out in the report of Britain’s Parliamentary Commission on Banking Standards, but the enormity of the reconstruction required to reform an industry that was (and still is) flawed from top to bottom. The brief for the commission, drawn from both houses Continue Reading

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  • Hester’s departure gives clues to future shape of UK banking

    The departure of RBS chief Stephen Hester is not the beginning of the end of Britain’s banking reconstruction – but it is the end of the beginning. The news begins a seven-day period that will see the UK’s Parliamentary banking standards commission publish its report (expected any day) and the initial response to it by George Osborne, chancellor of the exchequer, at the City’s Continue Reading

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  • Barclays has vaccine against future ills

    Those who exalt themselves will be humbled and those who humble themselves will be exalted.” To judge from reaction to last week’s reports on the collapse of HBOS and on Barclays’ culture, the conclusion of the Parable of the Pharisee and the Tax Collector should be carved into the portals of every banking boardroom as a warning to occupants. The Continue Reading

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  • The cost of making bankers behave

    The rules have changed. You won’t feel comfortable at Barclays and, to be frank, we won’t feel comfortable with you as colleagues.” The message in this month’s letter to staff from Antony Jenkins, the bank’s new chief executive, was plain: if you don’t like our values, get out. It is a strong start to reforming the bank’s culture but, as Barclays’ recent history shows, Continue Reading

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  • Time to seize the opportunity of the banking crisis

    These should be ideal conditions to redesign the industry, writes Philip Augar May you live in interesting times” runs the Chinese curse and for the world’s banks, as Citigroup’s announcement of 11,000 job cuts and a $1bn restructuring charge shows, the times do not get much more interesting than this. Thanks to self-inflicted wounds and consequential external pressures, the leveraged business model Continue Reading

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  • Too big to manage or regulate are what matter now

    This one is a game-changer. We have got used to the idea that incompetence, greed and hubris led to the banking crisis. But the organised, systematic manipulation of the central reference point of the free market, as exposed by the revelation that Barclays tried to manipulate a benchmark interest rate, casts the global banking industry in a very different light. The Continue Reading

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  • Questions for capitalism on Big Bang’s birthday

    There was a lot to deplore in the City before Big Bang, the reforms of Britain’s stock exchange that took place 25 years ago this week. The old exchange was an oligopoly that kept prices high and competition out. The City was sexist, snobbish and not very hard working. Certain partners disappeared for lunch at 11.45 and reappeared three hours Continue Reading

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  • The price and perils of taking on the banks

    Poring over the minutiae of the British banking sector is not everyone’s idea of fun, but Sir John Vickers and his colleagues on the UK’s Independent Banking Commission have spent the past year doing just that. The work will have been intricate and those involved deserve some sympathy. For as things stand, next week’s report, despite presumably offering rigorous analysis Continue Reading

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  • Exchanges jostle to escape the middle

    According to the Austrian economist Joseph Schumpeter, the “process of creative destruction is the essential fact about capitalism”. It is therefore apt that the investment exchanges, the places where investors and issuers meet at the crossroads of capitalism, should be exemplifying this so fully. It is unusual to see the competitive market operating at full throttle in financial services. Ironically Continue Reading

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  • Only global action can curb bonuses

    The UK government’s current embarrassment over banking bonuses illustrates three uncomfortable truths. First, the global response to the banking crisis of 2007-09 was flawed in many crucial respects. Second, the financial services industry is American-led and the rest of the world has little option but to salute the US flag. Third, British politicians either misunderstood the industry they were trying to Continue Reading

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  • Barclays’ success comes at a price

    The date was October 4 1997 and Martin Taylor, Barclays’ then chief executive, had just announced that the bank was to sell the equities and corporate finance parts of BZW, its investment bank. It looked like the end of Barclays’ universal banking ambitions and, according to the FT’s Lex column: “Faced with a choice between pouring perhaps billions of dollars Continue Reading

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  • It is time to strip the banks of their clutter

    Last year we called for an impartial inquiry into the role of banking and the independent commission announced this week by the chancellor of the exchequer fits the bill in terms of remit and membership. Society needs banks but not the self-serving kind we have today. The commission has an opportunity to put this right. In doing so it will Continue Reading

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  • A win for Citi but banking is still in the dock

    The court has ruled: Citigroup did not act improperly over the sale in 2007 of EMI to Guy Hands’ Terra Firma private equity group. Yet while the bank has been acquitted, the universal banking model has not. Citigroup was involved on both sides of the deal and it is the willingness of three financially sophisticated parties to countenance a blatant conflict Continue Reading

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  • Why it’s not the end for the City of London

    As UK chancellor of the exchequer from 1997 to 2007, Gordon Brown’s approach was to shear the sheep, not kill them. Leftwing demands to raise the top rate of income tax and abolish tax concessions for foreign non-domiciled residents were ignored and capital gains tax was cut. The government went out of its way to help the City of London. The Continue Reading

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  • To fix the system we must break up the banks

    In coming up with solutions that address the immediate crisis but fail to tackle dangerous systemic issues, the Group of 20’s emerging ideas on the banking industry bear a striking resemblance to the Americans’ response to the dotcom crash of 2001-02. Back then, the burst bubble exposed biased research and stock price manipulation on Wall Street and dubious accounting practices in US Continue Reading

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  • Cutting bankers down to size

    Attacking bonuses addresses the symptom of the crisis, not the cause. It's time to break up the investment banks 'It is like taking bubble gum from a sweet shop. They make off with one packet at a time, then after a while the box is empty." The speaker was the chief executive of one of London's boutique investment banks and Continue Reading

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  • Insiders cannot provide answers on finance

    The consultation document authored by Sir David Walker, the former regulator and investment banker, on the governance of financial institutions follows other reports led by senior City figures, including Financial Services Authority chairman Adair Turner on banking regulation and Sir Win Bischoff, former Citigroup chairman, on London’s global competitiveness. The combined results are exactly what you would expect from asking a Continue Reading

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