Counterparties: The new “nice guy” at Barclays

August 30, 2012

At the top of its list of criteria for a new CEO, Barclays seems to have had “not Bob Diamond”. That’s the message the under-fire bank sent three weeks ago with its appointment of vocal corporate governance hawk David Walker as its new chairman. And it’s been reinforced by today’s announcement of Anthony Jenkins as its new CEO. Jenkins will be paid £1.1 million ($1.7 million) annually and be eligible for bonus and incentive pay of up to £7.15 million ($11.3 million). 

Whereas Bob Diamond was an American investment banker, Jenkins is a British commercial banker. That could mean a change in priorities, write the WSJ’s David Enrich and Max Colchester: 

Barclays’s board is hoping that installing a mild-mannered Brit to replace the assertive American will help move the bank forward, according to people familiar with the board’s thinking … One of Mr. Jenkins’s challenges will be figuring out what to do with Barclays’s lucrative but risky investment-banking arm. Mr. Diamond spent years building that business, partly through the 2008 acquisition of Lehman Brothers’s North American operations.

Jenkins also faces a fresh criminal investigation of Barclays by the UK’s Serious Fraud Office. At issue is whether payments Barclays made to a unit of the Qatari sovereign wealth fund were properly disclosed. The Guardian’s Simon Goodley writes that in June 2008, when Barclays was raising capital in the country, the fees Barclays paid the Qataris were listed at £100 million. By November, that amount had risen to £300 million. Barclays was also hit at the end of June with a fine for mis-selling interest rate swaps to small business. And all that’s on top of the embarrassing Libor scandal that cost the bank $450 million to settle.

Given the context, Barclays’ choice of a “talented ‘nice guy’” who prides himself on his “very measured style” makes a lot of sense. — Ben Walsh

On to today’s links:

The media is still waking up to the “post-truth” age of politics – The Atlantic
“Factual shortcuts”, or how the AP says “lies” – Associated Press 

“The financial system rests on quicksand” because of failed money-market reform – FT 

For some reason, Julian Robertson offered Romney $30 million a year to run his hedge fund – NYT
What’s $30 million to an 80-year-old tycoon? – Ben Walsh
The SEC confirms: Leave the stock picking to the pros – NY Mag 

Why you shouldn’t fear interest as a percent of GDP, in one soothing chart – Dean Baker 

“Investor euphoria” over Apple is still nothing like ’90s-era Microsoft – Felix Salmon

Citigroup pays $590 million to settle charges it deceived investors over subprime debt – WSJ 

Waning Superpowers
Bane protests Bain – Buzzfeed 

BofA shows Housingwire data indicating that it, in fact, it has modified mortgages under settlement – Housingwire
BofA, which has the biggest settlement obligations, hasn’t modified a single first-lien mortgage as of the end of June – WSJ

“I can hear music for the first time ever, what should I listen to?” – The Atlantic

Romney probably wouldn’t kill Dodd-Frank, but he would revamp it – Bloomberg

US companies are making more money in the US – WSJ

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