UK banks no longer 'too big to fail': BoE

rfi –AFP, 10 June 2022 

Following the financial global crisis more than a decade ago, the UK taxpayer
pumped £137 billion ($171 billion) into the country's banks Tolga Akmen AFP/File

London (AFP) – Britain's biggest banks are no longer "too big to fail" in any future financial shocks, with shareholders rather than taxpayers ready to bear the cost, the Bank of England said Friday. 

Following a major review of eight lenders -- including Barclays, HSBC, Lloyds and NatWest -- the BoE concluded "that if a major UK bank failed today it could do so safely: remaining open and continuing to provide vital banking services to the economy. 

"Shareholders and investors, not taxpayers, will be first in line to bear the costs, overcoming the 'too big to fail' problem," the central bank added. 

Following the financial global crisis more than a decade ago, the UK taxpayer pumped £137 billion ($171 billion) into the country's banks, while also being able to benefit from significant BoE support. 

The government also took control of Royal Bank of Scotland -- rebranded as NatWest ahead of its recent return to the private sector. 

Despite the bailouts, "the disruption to the financial system contributed to the UK and global recession that followed. We cannot forget these lessons", the BoE added Friday. 

The central bank was publishing its first assessment of the eight major UK banks' preparations for resolution under the Resolvability Assessment Framework. 

RAF "is a core part of the UK's response to the global financial crisis, and demonstrates how the UK has overcome the problem of 'too big to fail'", said Dave Ramsden, deputy governor for markets and banking at the BoE. 

"The UK authorities have developed a resolution regime that successfully reduces risks to depositors and the financial system and better protects the UK's public funds." 

The other four banks assessed were Nationwide, Santander UK, Standard Chartered and Virgin Money UK.

EU fines five major banks 1 bn euros for currency collusion

Yahoo – AFP, May 16, 2019

.With collusion between traders, clients may not have gotten the best rates (AFP
Photo/Daniel LEAL-OLIVAS)

Brussels (AFP) - The EU's powerful anti-trust authority on Thursday fined five major banks -- including Barclays and Citigroup -- more than a billion euros for collusion in the massive foreign exchange currency market.

The European Commission sanctioned Barclays, the Royal Bank of Scotland, Citigroup, JPMorgan and Japan's MUFG Bank a total of 1.07 billion euros ($1.2 billion) after finding that traders colluded to fix exchange rates using electronic chat rooms, a statement said.

The commission said Swiss giant UBS received no fine as it revealed the collusion to the authorities.

"These cartel decisions send a clear message that the commission will not tolerate collusive behaviour in any sector of the financial markets," said EU Competition Commissioner Margrethe Vestager.

"The behaviour of these banks undermined the integrity of the sector at the expense of the European economy and consumers," she added.

The decision involves two cases of forex manipulation, with the first known as "Essex Express 'n the Jimmy" because all the traders (except Jimmy) lived in the county to the east of London, the commission said.

The other one was called "Three-way banana split", though the EU's executive arm did not explain why.

"Some of the traders created the chat rooms and then invited one another to join, based on their trading activities and personal affinities, creating closed circles of trust," the commission explained.

The collusion took place between 2007 and 2013, roughly the years of the financial crisis and has been sanctioned by other authorities, including the US.

Except Japan's MUFG, the banks cooperated with the commission and in return received lighter fines than the EU's maximum amount.

"We are pleased to resolve this historical matter, which relates to the conduct of one former employee. We have since made significant control improvements," said a spokesperson for JPMorgan.

Several of the banks, including Barclays, had already provisioned for the fines in earlier filings.

Barclays to pay $2 bn fine for crisis-era fraud: US authorities

Yahoo – AFP, March 29, 2018

US authorities say Barclays "intentionally misrepresented" key facts about
securities sold to investors from 2005 to 2007, and the bank has agreed to pay a
large fine to resolve the fraud case (AFP Photo/Tolga AKMEN)

Washington (AFP) - British banking giant Barclays has agreed to pay a $2 billion fine to resolve a fraud case involving mortgage derivatives sold in the run-up to the 2008 global financial crisis, the US Justice Department said Thursday.

Authorities said the loans underlying the investment vehicles "were significantly less creditworthy than Barclays represented," and the company "intentionally misrepresented" key facts about the mortgages involved.

Federal prosecutors also reached settlements with two former Barclays executives over their roles in the sale and trading of residential mortgage-backed securities (RMBS), a type of investment derivative that bundled home loans into securities sold to investors.

Paul Menefee of Austin, Texas, the former head banker for subprime RMBS securitizations at Barclays, and John Carroll of Port Washington, New York, former head trader for subprime loan acquisitions, will pay a combined total of $2 million.

The settlement made Barclays the latest major bank to be sanctioned for crisis-era fraud nearly a decade after the collapse of major New York financial institutions dealing in mortgage-backed derivatives sparked a global recession.

Last week, Swiss bank UBS agreed to pay $230 million to New York state, also settling charges the bank had misrepresented the value of mortgages underlying securities sold before the crisis.

After a three-year investigation, federal prosecutors accused Barclays of a fraudulent scheme involving 36 deals in RMBS initially valued at $31 billion.

Barclays misled investors about the assets' quality, causing billions of dollars in losses, the Justice Department said in a statement.

The bank lied about the creditworthiness of borrowers whose loans underpinned the securities and who then defaulted at "exceptionally high rates," the statement said.

In exchange for paying the fine, the Justice Department will withdraw a civil complaint filed against the Barclays in December 2016.

Accused ex-Barclays chief quits Rio Tinto board

Yahoo – AFP, June 21, 2017

Former Barclays chief executive John Varley has been charged with "conspiracy
 to commit fraud" over emergency fundraising from Qatar during the financial
crisis (AFP Photo/Shaun CURRY)

Sydney (AFP) - Former Barclays chief executive John Varley quit as a director of mining giant Rio Tinto on Wednesday after being charged with conspiracy to commit fraud in Britain.

He was among four senior executives from the bank charged on Tuesday by Britain's Serious Fraud Office (SFO) following a five-year investigation over emergency fundraising worth billions of dollars from Qatar during the financial crisis.

The Anglo-Australian miner's chairman Jan du Plessis said he had the "highest regard" for Varley, who has been on the Rio board since 2011.

"I am very grateful for John’s outstanding contribution over the five or so years he has been on the board," he said.

"The board holds him in the highest regard and will miss his valuable insight. Personally, I am not only losing a senior independent director, but a close colleague, whose wisdom and support I am going to miss tremendously."

His resignation as a non-executive director and chair of the company's remuneration committee will take immediate effect.

Britain's SFO said the charges he faces relate to Barclays "capital raising arrangements with Qatar Holding LLC and Challenger Universal Ltd, which took place in June and October 2008".

It added that they also involve a US$3-billion loan facility made available to the State of Qatar acting through the country's Ministry of Economy and Finance in November 2008.

Barclays has said it was "considering its position", with the defendants due to appear before London's Westminster Magistrates' Court on July 3.

German taxman goes after foreign banks

German state prosecutors are investigating nearly 60 foreign banks for "abetting tax evasion," a newspaper report has said. Self-declaring former tax-evaders are proving a particularly valuable source of information.

Deutsche Welle, 4 Oct 2016

Prosecutors in Germany's most populous state are investigating 57 foreign banks on charges of abetting tax evasion, according to the "Süddeutsche Zeitung." The banks, from Switzerland, Liechtenstein, Austria and Luxembourg, have all been under suspicion over the past two years, the report said on Tuesday.

The banks were brought to the investigators' attention thanks to a wave of German citizens offering voluntary declarations of their foreign bank accounts over the past six years - concentrating in particular on banks mentioned repeatedly.

The German authorities have already negotiated fines with banks in around 10 cases, according to the paper, amounting to a total of around 120 million euros ($135 million). The biggest single fine came from the Basler Kantonalbank, Switzerland, which handed over 37.1 million euros.

The Luxembourg bank BCEE has paid 14 million euros, while the Deutsche Bank in Switzerland has paid some 10 million euros. On top of that, in one particularly egregious case, a bank is believed to be negotiating a fine of around 60 million euros.

Walter-Borjans said prosecutors will
pursue every indication of tax evasion

The Austria-based Akte Walser Privatbank confirmed that it had paid its fine of 5.4 million euros, and that its policies had become tighter since the case. "Our bank changed the way it deals with foreign customers radically in 2009," a spokesman told the paper. "The requirements for the identification of customers and the transparency about the origin of the means are very strict."

BCEE did not respond to a request for comment, while a spokesman for Deutsche Bank in Switzerland told DW that it never comments on such cases.

New methods

Paying closer attention to voluntary declarations has become German prosecutors' new favorite method of tracking down tax evaders.

Instead of buying up CDs of customer data from disloyal bank employees (or other illicit sources) - a move that divided Germany's political parties when authorities spent several million euros to do so in the past - the authorities now increasingly investigate banks that repeatedly appear on voluntary declarations.

The former tax evaders are then questioned for more information about the banks. In an email to DW, however, a spokesman for the Cologne state prosecutors said they could "neither comment on or confirm" the "Süddeutsche Zeitung" report and that they did not record statistics about voluntary declarations.

Tenacious taxmen

North Rhine-Westphalia has become Germany's most vociferous tax crime prosecutor in recent years.

The NRW authorities have acquired 

CDs with account data in the past

The state has acquired 11 data storage devices since 2010, which according to a statement from early August, created a wave of voluntary declarations and fines that has brought some 6 billion euros to Germany's public coffers.

The most recent example was in August, when someone anonymously (and free of charge) sent the NRW Finance Ministry an external hard drive containing the details of some 160,000 bank accounts - 54,000 of which were German, around 50,000 Belgian, and around 42,000 French. State Finance Minister Norbert Walter-Borjans has pledged to pass on all the data the state has to the relevant foreign authorities across Europe.

The latest revelations show that German prosecutors are now paying particular attention to banks in Austria, where banking secrecy was once protected by the constitution. In 2014, the European Court of Justice ruled that this was unlawful, triggering a sharp rise in voluntary tax declarations, particularly in Bavaria - while many Austrian banks let employees go.

Last week, various German media outlets reported that the NRW tax authorities were also pursuing major multinational financial institutions, including J.P. Morgan, Barclays and HSBC, on suspicion of "devious stock trading," allowing them to avoid some 10 billion euros of tax over several years.

"Our tax investigations go after every suspicion - without regard for either individuals or credit institutions," Walter-Borjans said. He added that a number of banks had already entered into negotiations and were cooperating with authorities, though he would not go into details. He went on to urge other banks to follow suit.

Related Article:

Just 16% of Dutch consumers trust banks, new survey shows

ING to slash up to 7,000 jobs, 2,300 will go in the Netherlands

Big three Dutch banks have announced 40,000 job cuts since 2011

"The Recalibration of Awareness – Apr 20/21, 2012 (Kryon channeled by Lee Carroll) (Subjects: Old Energy, Recalibration Lectures, God / Creator, Religions/Spiritual systems (Catholic Church, Priests/Nun’s, Worship, John Paul Pope, Women in the Church otherwise church will go, Current Pope won’t do it), Middle East, Jews, Governments will change (Internet, Media, Democracies, Dictators, North Korea, Nations voted at once), Integrity (Businesses, Tobacco Companies, Bankers/ Financial Institutes, Pharmaceutical company to collapse), Illuminati (Started in Greece, with Shipping, Financial markets, Stock markets, Pharmaceutical money (fund to build Africa, to develop)), Shift of Human Consciousness, (Old) Souls, Women, Masters to/already come back, Global Unity.... etc.) - (Text version)

“… The Shift in Human Nature

You're starting to see integrity change. Awareness recalibrates integrity, and the Human Being who would sit there and take advantage of another Human Being in an old energy would never do it in a new energy. The reason? It will become intuitive, so this is a shift in Human Nature as well, for in the past you have assumed that people take advantage of people first and integrity comes later. That's just ordinary Human nature.

In the past, Human nature expressed within governments worked like this: If you were stronger than the other one, you simply conquered them. If you were strong, it was an invitation to conquer. If you were weak, it was an invitation to be conquered. No one even thought about it. It was the way of things. The bigger you could have your armies, the better they would do when you sent them out to conquer. That's not how you think today. Did you notice?

Any country that thinks this way today will not survive, for humanity has discovered that the world goes far better by putting things together instead of tearing them apart. The new energy puts the weak and strong together in ways that make sense and that have integrity. Take a look at what happened to some of the businesses in this great land (USA). Up to 30 years ago, when you started realizing some of them didn't have integrity, you eliminated them. What happened to the tobacco companies when you realized they were knowingly addicting your children? Today, they still sell their products to less-aware countries, but that will also change.

What did you do a few years ago when you realized that your bankers were actually selling you homes that they knew you couldn't pay for later? They were walking away, smiling greedily, not thinking about the heartbreak that was to follow when a life's dream would be lost. Dear American, you are in a recession. However, this is like when you prune a tree and cut back the branches. When the tree grows back, you've got control and the branches will grow bigger and stronger than they were before, without the greed factor. Then, if you don't like the way it grows back, you'll prune it again! I tell you this because awareness is now in control of big money. It's right before your eyes, what you're doing. But fear often rules. …”

Barclays parts with CEO Antony Jenkins

The chief executive of Barclays, Antony Jenkins, is stepping down, the UK bank announced on Wednesday. The board says new leadership was necessary to take the bank forward.

Deutsche Welle, 8 July 2015

In a statement published on Wednesday, the bank said that "a new set of skills were required for the period ahead" and that the bank needed "to be much more focused on what is attractive, what we are good at, and where we are good at it."

Chairman John McFarlane would act as interim CEO until a replacement for Jenkins, who had led the bank since 2012, could be found, the bank said.

In the statement, Barclays' management stresses that the bank had to "improve revenue, costs and capital performance."

"We also need to become more externally focused and deal with the internal bureaucracy by becoming leaner and more agile," it added.

But the bank said the change of leadership would not equate to a change in strategy at the bank.

Jenkins, who succeeded Bob Diamond - himself forced to resign after the Libor rate-fixing scandal - had been trying to restore the bank's reputation after it was fined £290 million ($447 million, 391 million euros) by British and US regulators in 2012 for attempted manipulation of Libor and Euribor interbank rates in 2005 and 2009.

The bank was also embroiled in a foreign exchange rigging scheme. Six major global banks, including Barclays and British peer Royal Bank of Scotland, were fined a total of almost $6 billion.

ng/jil (Reuters, AFP)

Related Article:

US, Britain fine six top banks nearly $6 bn for forex, Libor abuses

US, Britain fine six top banks nearly $6 bn for forex, Libor abuses

Yahoo – AFP, John Biers, 20 May 2015

The far-flung settlement included guilty pleas from Barclays Bank, JPMorgan

 Chase, Citicorp and the Royal Bank of Scotland for conspiring to manipulate

the massive currency market (AFP Photo/Ben Stansall)

New York (AFP) - US and British regulators fined six major global banks a total of nearly $6 billion between them Wednesday for rigging the foreign exchange market and Libor interest rates.

They said forex traders from the banks had met in an online chatroom brazenly named "the Cartel" to set rates that cheated customers while adding to their own profits in the massive global currencies market.

In the far-flung settlement, Barclays Bank, JPMorgan Chase, Citicorp and the Royal Bank of Scotland all pleaded guilty to US Justice Department charges of conspiring to manipulate the massive currency market.

Switzerland's UBS meanwhile pleaded 

guilty to violating a prior settlement of

 charges for rigging the Libor interest rate 

(AFP Photo/Fabrice Coffrini)

Switzerland's UBS meanwhile pleaded guilty to violating a prior settlement of charges for rigging the Libor interest rate.

And Bank of America was included with the other five in fines levied by the US Federal Reserve in the forex rigging case.

"They acted as partners -- rather than competitors -- in an effort to push the exchange rate in directions favorable to their banks but detrimental to many others," said US Attorney General Loretta Lynch.

"And their actions inflated the banks' profits while harming countless consumers, investors and institutions around the globe."

'The Cartel'

In Wednesday's settlement, the Department of Justice meted out its largest set of antitrust fines ever, assessing $2.5 billion against Barclays, JPMorgan, Citicorp and RBS in the forex case.

Those four, plus UBS and Bank of America, will also pay more than $1.8 billion to the US Federal Reserve over "unsafe and unsound practices" in forex markets.

Barclays, which did not take part in a previous settlement last November with various agencies, was additionally fined more than $1.3 billion by Britain's Financial Conduct Authority, the New York State Department of Financial Services, and the US Commodity Futures Trading Commission.

Combined with a $203 billion Justice Department fine for UBS in the Libor case, and other penalties, the total assessed Wednesday was almost $6 billion.

Regulators described a bold scheme by financial heavyweights to orchestrate trades in the $5.3-trillion-per-day global foreign exchange market.

JPMorgan blamed its role principally on

 a single trader who has been dismissed 

(AFP Photo/John Moore)

Traders from the banks, communicating via the "Cartel" chat room, agreed to withhold bids or offers for euros or dollars at distinct times to protect each other's trading positions, the Justice Department said.

The banks involved represented at least one-fourth of dollar-euro transactions each year and "were uniquely positioned to manipulate the market," said Assistant Attorney General Bill Baer.

A number of traders are facing charges in various countries for their roles in the scheme.

Barclays fined $2.4 billion

The size of penalties on individual banks ranged from the hundreds of millions of dollars to $2.4 billion for British bank Barclays, depending on a bank's involvement in the scheme.

The Barclays sum was high because it had not participated in the November settlement between several banks and the FCA, DFS and CFTC.

Georgina Philippou, the FCA's director of enforcement, called Barclays' role "another example of a firm allowing unacceptable practices to flourish on the trading floor."

Barclays chief executive Antony Jenkins said he regretted that "some individuals" within the bank "have once more brought our company and industry into disrepute."

"This demonstrates again the importance of our continuing work to build a values-based culture and strengthen our control environment," he said.

Citigroup, which had the second largest total fine of $1.3 billion, called the scandal "an embarrassment to our firm, and stands in stark contrast to Citi's values."

Citigroup, which had the second largest

 total fine of $1.3 billion, called the scandal

 "an embarrassment to our firm, and

 stands in stark contrast to Citi's values" 

(AFP Photo/Don Emmert)

Citigroup said it had separately reached an agreement to pay $394 million to settle related private US class action claims.

JPMorgan blamed its role principally on a single trader who has been dismissed.

"The lesson here is that the conduct of a small group of employees, or of even a single employee, can reflect badly on all of us, and have significant ramifications for the entire firm," said JPMorgan chief executive Jamie Dimon.

The Justice Department's $203 million fine against UBS, and $60 million levied on Barclays, related to their violating a 2012 settlement for conspiring to rig Libor, the global commercial interest rate benchmark used to peg millions of rate-sensitive contracts and loans around the world.

But, because it offered early cooperation in the forex rigging case, the Swiss bank earned conditional immunity from those charges.

In a settlement announced by the US Justice Department on Wednesday, the banks

agreed to pay close to $6 billion (5.3 billion euros) in fines for their manipulations.

Related Articles:

Six top banks fined for forex, Libor abuses


"The Recalibration of Awareness – Apr 20/21, 2012 (Kryon channeled by Lee Carroll) (Subjects: Old Energy,Recalibration Lectures, God / Creator, Religions/Spiritual systems (Catholic Church, Priests/Nun’s, Worship, John Paul Pope, Women in the Church otherwise church will go, Current Pope won’t do it), Middle East, Jews, Governments will change (Internet, Media, Democracies, Dictators, North Korea, Nations voted at once), Integrity (Businesses, Tobacco Companies, Bankers/ Financial Institutes, Pharmaceutical company to collapse), Illuminati (Started in Greece, with Shipping, Financial markets, Stock markets, Pharmaceutical money (fund to build Africa, to develop)), Shift of Human Consciousness, (Old) Souls, Women, Masters to/already come back, Global Unity.... etc.) -(Text version)

“… The Shift in Human Nature

You're starting to see integrity change. Awareness recalibrates integrity, and the Human Being who would sit there and take advantage of another Human Being in an old energy would never do it in a new energy. The reason? It will become intuitive, so this is a shift in Human Nature as well, for in the past you have assumed that people take advantage of people first and integrity comes later. That's just ordinary Human nature.

In the past, Human nature expressed within governments worked like this: If you were stronger than the other one, you simply conquered them. If you were strong, it was an invitation to conquer. If you were weak, it was an invitation to be conquered. No one even thought about it. It was the way of things. The bigger you could have your armies, the better they would do when you sent them out to conquer. That's not how you think today. Did you notice?

Any country that thinks this way today will not survive, for humanity has discovered that the world goes far better by putting things together instead of tearing them apart. The new energy puts the weak and strong together in ways that make sense and that have integrity. Take a look at what happened to some of the businesses in this great land (USA). Up to 30 years ago, when you started realizing some of them didn't have integrity, you eliminated them. What happened to the tobacco companies when you realized they were knowingly addicting your children? Today, they still sell their products to less-aware countries, but that will also change.

What did you do a few years ago when you realized that your bankers were actually selling you homes that they knew you couldn't pay for later? They were walking away, smiling greedily, not thinking about the heartbreak that was to follow when a life's dream would be lost. Dear American, you are in a recession. However, this is like when you prune a tree and cut back the branches. When the tree grows back, you've got control and the branches will grow bigger and stronger than they were before, without the greed factor. Then, if you don't like the way it grows back, you'll prune it again! I tell you this because awareness is now in control of big money. It's right before your eyes, what you're doing. But fear often rules. …”

Five big banks hit with $3.2bn forex rigging fines

Yahoo – AFP, Roland Jackson, 12 Nov 2014

British bank HSBC and US peers Citigroup were among five banks fined

by regulators (AFP Photo/Facundo Arrizabalaga)

The hefty fines centred on London, the world's biggest hub for the $5.3-trillion-per-day forex market, and the British government hailed a move to "clean up corruption" in the City as the financial centre's reputation has been badly damaged in recent years.

British banks HSBC and Royal Bank of Scotland (RBS), US peers Citigroup and JPMorgan Chase, and Swiss lender UBS have all been fined by Britain's Financial Conduct Authority (FCA) and the US Commodity Futures Trading Commission (CFTC).

JPMorgan is one of five banks facing

 huge fines over alleged foreign exchange

rigging (AFP Photo/Timothy A. Clary)

The FCA hit the five banking giants with a record penalty of £1.1 billion ($1.7 billion, 1.4 billion euros), while the CFTC has fined them $1.4 billion.

The Swiss Financial Market Supervisory Authority (FINMA) also announced a settlement of 134 million Swiss francs ($139 million) with UBS over the matter.

Barclays uncertainty

However Barclays -- which was at the heart of the 2012 Libor rate-rigging affair -- was not included in the settlements and remains under investigation by authorities.

The uncertainty sent Barclays' share price sliding 2.15 percent to 229.55 pence in early afternoon deals on the falling FTSE 100 index. The bank had last month set aside £500 million for a potential fine to settle forex allegations.

In recent years, a string of scandals has damaged the reputation of major banks, which sparked the notorious 2008 global financial crisis that led to a subsequent worldwide recession.

The FCA said that it found "ineffective controls" at the five banks between 2008 and 2013, allowing traders "to put their banks' interests ahead of those of their clients, other market participants and the wider UK financial system".

"The traders put their own interests ahead of their customers. They attempted to manipulate the market and abused the trust of the public and us as regulators," FCA chief executive Martin Wheatley told reporters at a press conference in London.

The FCA said that it had proposed new rules for the 36 banks operating in the foreign exchange market.

British banks HSBC and Royal Bank of Scotland (RBS), US peers Citigroup

 and JPMorgan Chase, and Swiss lender UBS have all been fined by Britain's

 Financial Conduct Authority (FCA) and the US Commodity Futures Trading

 Commission (CFTC) (AFP Photo)

The investigation homed in on trading in the world's top 10 currencies, known as the "G10".

Traders at the different banks "formed tight knit groups in which information was shared about client activity", the British regulator said.

It added that traders used code to identify clients without naming the them. They referred to themselves with nicknames like "The 3 Musketeers", "The Players" and "The A-team".

'Conflicts of interest'

"The banks failed to manage obvious risks around confidentiality, conflicts of interest and trading conduct," the FCA said.

At the same time, the CFTC said in a separate statement that the five banks were being punished for "attempted manipulation of, and for aiding and abetting other banks' attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders."

It added that Citi, HSBC, JPMorgan, RBS and UBS had "coordinated trading with other banks in private chat rooms in their attempts to manipulate" the market.

The CFTC also ordered the banks to "cease and desist from further violations, and take specified steps to implement and strengthen their internal controls and procedures."

Bank of England governor Mark Carney expressed deep concern over the forex scandal.

Regulators say banks attempted to

manipulate global foreign exchange
benchmark rates to benefit certain traders
(AFP Photo/Scott Olson)

"We have been concerned about the circumstances around this and the conduct in markets more generally," Carney said Wednesday.

News of the FCA fine was welcomed by the British government.

"Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone," said finance minister George Osborne.

"The banks that employed them face big fines -- and I will ensure that these fines are used for the wider public good."

The total FCA fine is a record amount and eclipses the £532 million penalty it handed down over the Libor scandal.

Christopher Dembik, an economist at Saxo Bank in France, said the fines were "extremely weak and perfectly manageable" compared to the banks' holdings.

But he added that it did show a "willingness" of regulators "not to repeat the mistakes made in the last global financial crisis."

Barclays to cut 19,000 jobs as it scales back investment bank business

More than half of overall losses will be in UK as part of shake-up by boss Antony Jenkins including creation of a 'bad bank'

theguardian.com, Jill Treanor, Thursday 8 May 2014

The cuts to Barclay's investment banking division come after a year CEO Antony
 Jenkins was criticised for increasing bonuses by 10% when profits fell 32%
 Photograph: Yui Mok/PA

Barclays is axing 19,000 jobs in a radical overhaul of its business, including a dramatic scaling back of its troublesome investment banking operations, where almost one in three jobs are to go. More than half of the 19,000 job cuts will fall in the UK.

Facing pressure to bolster the bank's profits, Barclays' chief executive, Antony Jenkins, said: "This is a bold simplification of Barclays. We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage."

The cutbacks will see the headcount reduced to 120,000 by 2016 although Jenkins has previously indicated the number could eventually fall to 100,000 as technology replaces people.

Barclays shares rose 3% in early trading despite concerns from analysts that the bank would lose revenue as a result of the cuts in the investment banking division, traditionally the group's powerhouse.

The investment bank, which was built up by Jenkins' predecessor Bob Diamond, is to lose 7,000 jobs from a workforce of about 24,000. The division – once known as Barclays Capital and the most controversial of the bank's business areas – shifts away from its traditional area of expertise in fixed income, currencies and commodities and more towards corporate finance and equities.

Jenkins, who replaced Diamond in the wake of the Libor rigging scandal, said in February that up to 12,000 jobs would go this year. That total is now being raised to 14,000 as another 2,000 jobs will go in the investment bank this year. That leaves 5,000 investment bankers facing redundancy by 2016.

The cuts to the investment bank take place after a year in which Jenkins was criticised for increasing bonuses by 10% when profits fell 32% because he feared what he described as a "death spiral" as top bankers defected.

Jenkins said the changes in the investment banking division were talking place because of regulatory demands that the bank hold more capital. "There have been two very significant changes in the last 12 months. Regulation has become much clearer, and the impact of regulation on certain aspects of the investment bank, which are much more capital intensive," he told CNBC.

"We also believe the economic environment has deteriorated for the FICC [fixed income, currencies and commodities] business and some of the pressures we saw on the business towards the end of last year are clearly structural as well as cyclical, so now is the right time to reposition the bank," he said.

He intends to reduce the proportion of the banks' assets used for investment banking from 50% to 30% by 2016, so that personal and corporate banking, Barclaycard and the business in Africa make up the majority of the business.

Unions expressed concerned about the impact on the high street bank, where there are expectations that Barclays will close more branches.

"These have been extraordinarily turbulent times for ordinary Barclays workers who have worked hard to keep the bank on track against a backdrop of continued uncertainty and redundancies. The bank needs to recognise their tireless work to put customers first while jobs have been lost and give reassurances over their futures," said Dominic Hook, a Unite national officer.

A noncore division – dubbed a "bad bank" – will be created to take on £90bn of unwanted business in the investment banking side, including commodities, derivatives and some emerging markets products, together with about £16bn deployed in the European high street bank businesses, including in Spain, which could be spun off in a stock market flotation, and £9bn from corporate, Barclaycard and the wealth division.

"As a consequence of these changes, Barclays will become significantly more balanced and in turn able to deliver higher, more sustainable returns through the cycle," the bank said.

Sandy Chen, analyst at Cenkos, said: "Let's be clear: shrinking the investment bank drastically and pulling back from European banking are good things to do for Barclays, and we agree with management that this will increase longer-term sustainable, through-the-cycle profitability. It's just the uncertainties involved with the next two to three years of hacking back the brambles that we're a bit concerned about – and the income-generating capacity of the severely pruned Investment Bank that will emerge".

Jenkins – who has set himself on a plan to turn Barclays into the "go to" bank – said the cuts would cost another £800m on top of the existing £2.7bn already announced to turnaround the group.

US regulator sues 16 banks for alleged Libor rigging

BBC News, 14 March 2014

 

Some of the world's biggest banks have been accused of colluding to fix Libor

Libor scandal

• Former trader charged over Libor
• Libor change responds to scandal
• EU proposals to take control of Libor
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A US regulator has sued 16 banks for allegedly manipulating the London interbank offered rate (Libor).

The Libor rate is used to set trillions of dollars of financial contracts, including mortgages and financial transactions around the world.

The regulator said the manipulation caused substantial losses to 38 US banks which were shut down during and after the 2008 financial crisis.

The sued banks include Barclays, HSBC, Citigroup and Royal Bank of Scotland.

The British Bankers' Association (BBA) has also been sued by the regulator - the US Federal Deposit Insurance Corporation (FDIC).

"BBA participated in the alleged scheme to protect the revenue stream it generated from selling Libor licenses and to appease the Panel Bank Defendants that were members of the BBA," it was quoted as saying by the AFP news agency.

The FDIC alleged that the banks mentioned in its lawsuit rigged the rate from August 2007 to at least mid-2011.

Other banks named in the lawsuit include Bank of America, JPMorgan Chase, Deutsche Bank, Lloyds Bank, Credit Suisse, UBS, and Rabobank.

Growing pressure

Libor is the average rate at which banks lend money to one another and is decided on a daily basis.

Most of the world's biggest banks contribute estimates to form the Libor.

But there have been allegations that some have looked to profit from it by understating or overstating their submissions.

Over the past two years, regulators across the globe have been investigating the manipulation of the rate and there have been $3.7bn (£2.26bn) in fines to date.

A string of international banks and brokers, including Barclays and the Royal Bank of Scotland, have faced both criminal and civil penalties for their involvement in the scandal.

Some banks have also been found to have understated their submissions in the period during and after the financial crisis.

They did so in order to avoid the perception that they were having to borrow at higher interest rates than their peers and might therefore be in financial difficulty.

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