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Barclays to consider bank break-up

Barclays is to consider dividing its bank into two to separate its investment banking arm from the retail and commercial divisions, according to reports.

The Sunday Times reports the investment bank, formerly known as Barclays Capital, could be floated in New York, with the rest of the bank keeping its London listing.

The Barclays board is also thought to be urging former chief executive Bob Diamond, who quit last week in the wake of the Libor and interest rate swap misselling scandals, not to accept his full payoff of up to £17m.

Barclays was fined £290m last month for manipulating Libor, and is also one of four banks that have agreed to pay redress over the misselling of interest rate swaps.

The newspaper reports senior Barclays figures are believed to have met the Association of British Insurers to discuss plans to cut Diamond’s exit package.

Barclays’ official statement was that splitting its investment arm was not being considered, but two senior insiders and one former board member told the newspaper the plan would be studied.

The source said: “We have to consider whether there is greater value for shareholders from a break-up. We are faced with a hostile regulator and capital requirements in Britain that are restrictive.”

Barclays chairman Marcus Agius announced his intention to step down last week. He will stay on to lead the search to replace Diamond. Deputy chairman Sir Mike Rake, currently chairman of Easyjet and BT, is tipped as the favourite to replace Agius, while head of Barclays’ retail bank Anthony Jenkins is favoured to become the new Barclays chief executive.

Bank of England deputy governor for financial stability Paul Tucker is appearing before the Treasury select committee this afternoon to explain his role in the Libor scandal.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Hostile regulator. Fancy that ………..

  2. Four banks that have agreed to pay redress over the misselling of interest rate swaps.

    SOFA will spend about £4M on an investigation, then trun around and say they do not have sufficient evidence to charge Mr D and his little tealeaves and just walk away !!

    One outcome for the banks and one for IFA’s

  3. Barclays statement – “We are faced with a hostile regulator and capital requirements in Britain that are restrictive.”

    So what! Man up!

    IFAs have been aware of this since the FSA was first set up. Instead of ensuring all firms, banks and advisers knew what was expected of them and had sufficient checks and balances in place to ensure the supervision of same was effective and based on sound fiscal principles, they concentrated their efforts in revising rule books (PIA, Lautro and Fimbra) which were quite clear and understandable for both consumers, firms and advisers, then implement a culture change codenamed RDR (retail distribution review) cunningly disguised as to it clear intent, the “Retail Destruction Review” and had a system of employment of inadequate individuals, with little or no knowledge of how the industry was supposed to work, whose salaries and expenses most IFAs could only dream of and who did not actually have to produce anything, but simply fine people who did and maybe got it wrong.

    Once that was all in place, they allow government to take possession of fines for rule breakers which was supposed to reduce the costs of regulation for those who did not break the rules.

    A more corrupt, inept and totally unsuitable way to regulate our industry it is impossible for this simple man to comprehend.

    The FSA is more like a third world dictatorship, than a useful regulator, it does not even conform to the Regulators code of conuct or the law.

  4. OK Barclays have some issues, but well done FSA, driving a Bank that contributes considerably to the UK tax take to another country, keep it up and goodbye UK financial services. No-one to regulate so then what happens to your salaries and pensions. Yet again not thought this through.

  5. Good bye and good riddance!

  6. Hold on, when given a virtually free reign to do as they pleased under the FSA softly softly approach to regulation, the banks abused their privileges and basically led the world on a merry dance. Now that they’re being reigned in they’re complaining about hostile regulation? Sounds like the adults have arrived on the island to take control of the situation. Now who’s turn is it for the conch?

  7. Dominic Thomas 9th July 2012 at 5:48 pm

    I still don’t understand how someone can quit their job and still pick up £17m. What sort of stupid lawyers do these people use? Money for nothing and a lot less than that.

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