Barclays Bashed

The fallout from the banking crisis has been long, grossly incompetent on so many levels, calamitous, moral sapping and lacking logic to so many (well, to pretty much everybody outside of Westminster and the Banking sector). Yet, here we are 9 years on and headlines are still dominated by bank corruption and greed from that period.

 

The moral corruption of the sector seems to be just an accepted part of ‘what goes on’. The illegal corruption has been harder to pin down given the few instances that have actually ended in charges, the law courts or in fines……but Barclays look like they are going to get a bloody nose.

 

The Story……

Barclays took £12 billion from Qatar in 2008 as foreign investment, as banks scrambled to avoid nationalisation. These emergency funds allowed Barclays to avoid a Government bailout in 2008 at a time when rivals Lloyds Banking Group and Royal Bank of Scotland were forced to rely on a taxpayer rescue. Investigations have focused on a £2 billion loan advanced to Qatar by Barclays after the fundraisings were negotiated - the implication being that there was a money-go-round at work. Or to put that another way, Barclays was handing Qatar some of the money it was using to support the British bank. There are also instances of Barclays paying for fictitious ‘advisory services’ to the tune of over £300 million.

 

Interestingly, it has taken over 5 years to untangle the web to get this far and issue criminal charges. Even more interesting is that these are the first criminal charges related to the financial crisis that have been brought against a bank in the UK.

 

Which begs the question why are there so few criminal charges ……is it the complexity of the financial interactions, lack of investigating resources or limited financial experience of the investigations? More worryingly, is the moral corruption actually legal?

 

As we have seen over the years, fines have failed to stop banks pushing the envelope. Perhaps taking the liberty away from those involved is the only way that the message will get through.

 

Finally we are getting somewhere.