UK News

Insights from the UK and beyond

from Breakingviews:

Barclays’ HQ move talk puts regulators on the spot

It should come as no surprise that New York Mayor Mike Bloomberg welcomes the idea of Barclays moving its headquarters to Manhattan. It would be a prominent feather in his cap in the long-standing feud with London over who is the dominant global financial center. But U.S. regulators would be unlikely to match the mayor's warm welcome.

Barclays executives are considering making the Big Apple their new home if UK capital charges end up going too high. If it weren't for the financial crisis, such a move would be little more than a matter of lost tax revenue and national pride. But it would be the most glaring example yet of global regulatory arbitrage. It would also be ironic: U.S. banks have been complaining that new rules in last year's Dodd-Frank Act give Europeans the upper hand. And JPMorgan Chief Executive Jamie Dimon said in a speech on Wednesday that he feared U.S. bank capital requirements could end up more onerous than elsewhere.

Most of this is probably saber rattling as banks try to convince regulators, and in the case of Barclays the UK's Independent Commission on Banking, that some new rules need toning down. But it highlights the risks of watchdogs in each country clamping down on their charges without a greater measure of global harmonization.

On the one hand, having too harsh a regulatory regime could lead to businesses moving out, as appears to be the case with Barclays considering a New York domicile. If nothing else, Barclays has a duty to shareholders to examine its options. There's a big difference to the bottom line in holding, say, 10 percent Tier 1 capital instead of 7.5 percent, though such advantages might be offset by higher tax bills and potentially onerous restrictions once rules outlined in Dodd-Frank are finalized.

from Funds Hub:

Utilities vs banks: The evidence


Alpesh Patel caused quite a stir on Britain's Radio 4 this morning. The CEO of boutique investment house Praefinium Partners argued that Bob Diamond was on "a suicide mission to bring down capitalism". No word yet from the Barclays CEO on that one.

Maybe that was just the line his PRs had promised to the BBC producers to get him on air, though, and there is more logic to Patel's more substantial point about value creation in the banking sector in relation to bonuses and pay.

Is Barclays paying its bankers too much?


A Barclays sign is seen outside a branch of Barclays bank, in central London in this file picture. REUTERS/Toby Melville  

Barclays top-two — Chief Executive John Varley and President Bob Diamond — declined their 2009 bonus for the second year in a row, although the bank is paying the 23,000 staff at its investment bank £191,000 per head on average. The bank had a record year, but said all bonuses to its Executive Committee would be deferred, as it reacts to widespread criticism on bankers’ pay.

Have your say. Take our poll and leave us a comment.

Do you think Bob Diamond and John Varley did the right thing in declining their bonuses?

from Commentaries:

Now watch banks slither round the bonus curbs

Marcus Agius, the immensely wise chairman of Barclays, told a Spectator conference this week that his board paid "as little as we can get away with" to the hotshots under his command, but that to get the best, he had to pay the going rate.

Asked from the floor whether the (reported) 500 million dollars paid to Dick Fuld before the collapse of Lehman Brothers meant that he was the best, Agius could only mumble that he didn't know Mr Fuld.

Banks score own goal with bonus culture defence


In the blink of an eye it look as if the City is “booming” again after Barclays and HSBC announced buoyant investment banking earnings on Monday.

Both banks were hit by a surge in bad debts as the recession took its toll on borrowers, but analysts said that resurgent debt and foreign exchange trading and market share grabbed from troubled rivals fuelled the largely positive results.

from The Great Debate UK:

Barclays’ conjuring trick


-- Margaret Doyle is a Reuters columnist. The opinions expressed are her own --

REUTERSAbracadabra! Yet again, Barclays has pulled another rabbit out of its hat. With just days to go before the end-March deadline for the bank to apply for a government guarantee of its dodgier loans, it may again wriggle out of state control.

The Financial Services Authority (FSA) has concluded, after performing "stress tests" on its loan book, that the bank has enough capital. Barclays (BARC.L) has persuaded the authorities and investors (shares are trading at over three times their January low) -- of its soundness.

Blame or redemption for Christians in financial crisis?


Does being a Christian make you a better banker? Former Bank of England employee John Ellis raised the possibility during a church discussion in London on the financial crisis.

The Treasurer of the United Reformed Church pointed to the relative stability of HSBC — despite market speculation about its capital adequacy — compared with the parlous state of some of its rivals.