Barclays’ chief executive, Antony Jenkins, has said that it could take up to a decade for the bank to regain public trust in the aftermath of a series of scandals.
Mr Jenkins made the comment in a speech to students at Brooke House Sixth Form College in East London.
In the chat, which was broadcast on this morning's Today programme on BBC Radio 4, Mr Jenkins said: “Trust is a very easy thing to lose, and a very hard thing to win back.
"In my view it will takes several years - probably five to ten - to rebuilt trust in Barclays."
Barclays was the first bank to be implicated in the Libor scandal, in which traders rigged the London inter-banking rate, leading to a £290 million fine in June 2012, and the bank was also involved in the PPI mis-selling scandal.
Mr Jenkins vowed to restore Barclay’s reputation when he was made CEO in August last year, after the Libor scandal brought down his predecessor, Bob Diamond. In February he revealed his plan to overhaul the bank by fundamentally changing the culture under which its traders operate.
He added in his speech that he hoped the future actions of Barclays would help rebuild confidence in the wider banking sector.
Mr Jenkins chose as his theme “the importance of long-term thinking and planning, and proper leadership”.
“Trust is lost in weeks and months, and regained in years and decades,” he said.
"My point is not that short term markets are bad or inaccurate. They serve a very useful purpose. It is susceptible to elevator analysis – this is up this is down. In addition to looking at the short term and what that tells us how do we focus on longer term drivers of the economy."
British economist John Kay told the Today programme, which Mr Jenkins was guest editing, that bankers' now spend more time than religious leaders telling the public that they are ethical, while simultaneously working in an industry that has acted anything but ethically.
“Over the last 20 years banks have systematically destroyed their relationship with their customers,” Mr Kay said, adding that he was not very optimistic that things would improve.
Mr Jenkins responded by saying that that the cure to a rotten culture is proper leadership from the top, but that the process is a slow one.
"In my view leadership sets the culture in big organisations and culture drives organisational performance. If you want a different sort of organisational performance, a more ethical business, you’re going to have to change culture. Culture takes time to change and it comes back to leadership. If you take a long term perspective you’ll build the right culture," he said.
Mr Jenkins added that he was setting a target for Barclays to be more trusted than not by 2018.
It is one of eight commitments Jenkins will make to staff, customers, shareholders and what he calls society in a few months.
Source: Independent
Showing posts with label Barclays. Show all posts
Showing posts with label Barclays. Show all posts
Tuesday, December 31, 2013
Wednesday, September 5, 2012
Banks Face Suits as States Weigh Libor Losses
The scandal over global interest rates has state officials like Janet Cowell of North Carolina working intensely behind the scenes to build a case for suing the nation’s largest banks. Ms. Cowell, the state’s elected treasurer, and several of her staff members have spent the summer combing through the state’s investments trying to determine how much the state may have lost because of suspected manipulation of the London interbank offered rate, or Libor, which is used as a benchmark for trillions of dollars of financial contracts around the world.
“We think this could be as big as the mortgage crisis settlement, that this could be a really high impact situation and that we should be aggressive on this,” Ms. Cowell said, referring to the $25 billion settlement that the nation’s biggest banks entered with state attorneys general.
The activity provides a glimpse at how widely the Libor scandal has spread through the financial world, and how much damage may still be in store for the banks accused of manipulating Libor. Her work also suggests just how difficult it is, and how long it may take, to get to the bottom of the losses.
The attorneys general in Maryland, Massachusetts, New York and Connecticut have all been examining how much their states may have lost as a result of a lowered Libor. A spokeswoman for Connecticut’s attorney general, George C. Jepsen, said that the state’s work with New York’s attorney general, Eric T. Schneiderman, “has broadened significantly over the last few weeks and we are now coordinating with a much larger group of attorneys general.”
Even before the British bank Barclays admitted in June that its employees had tried to manipulate Libor, there were a number of lawsuits filed by cities and municipal agencies seeking damages from large banks for manipulating Libor. But while those cases were filed by private sector lawyers, the public officials are looking at bringing more wide-ranging lawsuits on behalf of the states. The Justice Department has coordinated with the states and is leading its own investigation.
The government officials are hoping that their cases will be bolstered by new settlements between regulators and individual banks that are suspected of participating in the manipulation. Most of the more than one dozen banks involved in setting Libor have said in official filings that they are in discussions with regulators about their involvement in the Libor process.
Libor is supposed to represent how much banks are paying for short-term loans from other banks. It is determined by the British Bankers Association after a daily poll of the world’s largest banks. It then serves as a benchmark for rates paid by consumers and businesses on everything from mortgages to derivatives to student loans.
Barclays said in its settlement that it and other banks pushed Libor down artificially during the financial crisis to appear more healthy. Barclays also admitted that its traders tried to manipulate Libor at other points in order to sweeten particular financial deals. Barclays paid $450 million to settle the charges.
The financial products used by states and local governments are especially vulnerable to an artificially lowered rate.
Ms. Cowell, a 44-year-old Democrat and former business consultant who is running for another four-year term, was aware of the potential implications of the Libor case for North Carolina almost as soon as the Barclays settlement was announced on June 27. The next Monday, at her weekly staff meeting, she asked her office’s lawyers and investment officers to begin looking into it.
The inquiry has focused primarily on two areas of the state’s finances.
One was the state’s public pension plans, which in North Carolina are overseen by the treasurer. A state money manager began identifying bonds held by the state pension fund and money market fund investments that derived their value from Libor.
In July, lawyers from the treasurer’s office took part in a conference call on the topic with pension funds in other states. Ms. Cowell and members of her staff have found a few investments held by the $76 billion pension fund that were tied to Libor, but they have now determined that the losses were most likely “pretty small.”
The other, more significant area where Ms. Cowell began looking for losses was in a kind of financial contract that many states use, known as an interest rate swap. States use swaps when they want to issue a bond at a floating interest rate but protect themselves from future swings in rates. In a standard swap, a state makes a regular payment to its bank and gets a payment back that is determined by the level of Libor. If Libor was lower, the payments will be, too.
North Carolina had two major swaps at the time the benchmark was suspected of being rigged. Together, the two swaps were tied to $1.3 billion of bonds that were issued in 2002 and 2005. The banks on the other side of these contracts included Bank of America, of Charlotte, N.C., and JPMorgan Chase & Company based in New York, both of which are involved in setting Libor.
The challenge facing North Carolina and other states is that there is no agreement yet on how much the banks actually manipulated Libor, and for how long. The lawsuits that have already been filed have estimated that the banks held Libor down by at least 30 basis points, or 0.30 percent, for three years. By one method of calculation, that could have meant losses for North Carolina of around $10 million on their swaps.
Ms. Cowell said she assumed that as more banks settled with regulators, those numbers would become clearer. In the meantime, the treasurer’s office is working out formulas for losses that they can plug numbers into if and when new settlements are made public. At that point, Ms. Cowell also plans to share her work with other municipal agencies in North Carolina that held about 40 swaps during the period in question.
“This is an unprecedented level of analysis, and an unprecedented wide spectrum of financial impact,” Ms. Cowell said.
The inquiry could provide a political bump for Ms. Cowell, who is seeking another term as anti-Wall Street sentiment is running high. A graduate of the Wharton School of Business, she served on the Raleigh, N.C., City Council and then the state Senate before taking office in 2008. She cites among her accomplishments the state’s maintaining its status as one of eight with a AAA rating from the major credit rating agencies.
North Carolina’s attorney general will make the final determination on whether the state will join existing lawsuits, proceed with its own case or take no action at all. The attorney general’s office did not respond to requests for comment.
But the office has been involved in many of the discussions with the treasurer’s staff, people involved in the meetings said.
Source: New York Times
“We think this could be as big as the mortgage crisis settlement, that this could be a really high impact situation and that we should be aggressive on this,” Ms. Cowell said, referring to the $25 billion settlement that the nation’s biggest banks entered with state attorneys general.
The activity provides a glimpse at how widely the Libor scandal has spread through the financial world, and how much damage may still be in store for the banks accused of manipulating Libor. Her work also suggests just how difficult it is, and how long it may take, to get to the bottom of the losses.
The attorneys general in Maryland, Massachusetts, New York and Connecticut have all been examining how much their states may have lost as a result of a lowered Libor. A spokeswoman for Connecticut’s attorney general, George C. Jepsen, said that the state’s work with New York’s attorney general, Eric T. Schneiderman, “has broadened significantly over the last few weeks and we are now coordinating with a much larger group of attorneys general.”
Even before the British bank Barclays admitted in June that its employees had tried to manipulate Libor, there were a number of lawsuits filed by cities and municipal agencies seeking damages from large banks for manipulating Libor. But while those cases were filed by private sector lawyers, the public officials are looking at bringing more wide-ranging lawsuits on behalf of the states. The Justice Department has coordinated with the states and is leading its own investigation.
The government officials are hoping that their cases will be bolstered by new settlements between regulators and individual banks that are suspected of participating in the manipulation. Most of the more than one dozen banks involved in setting Libor have said in official filings that they are in discussions with regulators about their involvement in the Libor process.
Libor is supposed to represent how much banks are paying for short-term loans from other banks. It is determined by the British Bankers Association after a daily poll of the world’s largest banks. It then serves as a benchmark for rates paid by consumers and businesses on everything from mortgages to derivatives to student loans.
Barclays said in its settlement that it and other banks pushed Libor down artificially during the financial crisis to appear more healthy. Barclays also admitted that its traders tried to manipulate Libor at other points in order to sweeten particular financial deals. Barclays paid $450 million to settle the charges.
The financial products used by states and local governments are especially vulnerable to an artificially lowered rate.
Ms. Cowell, a 44-year-old Democrat and former business consultant who is running for another four-year term, was aware of the potential implications of the Libor case for North Carolina almost as soon as the Barclays settlement was announced on June 27. The next Monday, at her weekly staff meeting, she asked her office’s lawyers and investment officers to begin looking into it.
The inquiry has focused primarily on two areas of the state’s finances.
One was the state’s public pension plans, which in North Carolina are overseen by the treasurer. A state money manager began identifying bonds held by the state pension fund and money market fund investments that derived their value from Libor.
In July, lawyers from the treasurer’s office took part in a conference call on the topic with pension funds in other states. Ms. Cowell and members of her staff have found a few investments held by the $76 billion pension fund that were tied to Libor, but they have now determined that the losses were most likely “pretty small.”
The other, more significant area where Ms. Cowell began looking for losses was in a kind of financial contract that many states use, known as an interest rate swap. States use swaps when they want to issue a bond at a floating interest rate but protect themselves from future swings in rates. In a standard swap, a state makes a regular payment to its bank and gets a payment back that is determined by the level of Libor. If Libor was lower, the payments will be, too.
North Carolina had two major swaps at the time the benchmark was suspected of being rigged. Together, the two swaps were tied to $1.3 billion of bonds that were issued in 2002 and 2005. The banks on the other side of these contracts included Bank of America, of Charlotte, N.C., and JPMorgan Chase & Company based in New York, both of which are involved in setting Libor.
The challenge facing North Carolina and other states is that there is no agreement yet on how much the banks actually manipulated Libor, and for how long. The lawsuits that have already been filed have estimated that the banks held Libor down by at least 30 basis points, or 0.30 percent, for three years. By one method of calculation, that could have meant losses for North Carolina of around $10 million on their swaps.
Ms. Cowell said she assumed that as more banks settled with regulators, those numbers would become clearer. In the meantime, the treasurer’s office is working out formulas for losses that they can plug numbers into if and when new settlements are made public. At that point, Ms. Cowell also plans to share her work with other municipal agencies in North Carolina that held about 40 swaps during the period in question.
“This is an unprecedented level of analysis, and an unprecedented wide spectrum of financial impact,” Ms. Cowell said.
The inquiry could provide a political bump for Ms. Cowell, who is seeking another term as anti-Wall Street sentiment is running high. A graduate of the Wharton School of Business, she served on the Raleigh, N.C., City Council and then the state Senate before taking office in 2008. She cites among her accomplishments the state’s maintaining its status as one of eight with a AAA rating from the major credit rating agencies.
North Carolina’s attorney general will make the final determination on whether the state will join existing lawsuits, proceed with its own case or take no action at all. The attorney general’s office did not respond to requests for comment.
But the office has been involved in many of the discussions with the treasurer’s staff, people involved in the meetings said.
Source: New York Times
Tuesday, September 4, 2012
Barclays makes £500m betting on food crisis
Barclays has made as much as half a billion pounds in two years from speculating on food staples such as wheat and soya, prompting allegations that banks are profiting handsomely from the global food crisis. Barclays is the UK bank with the greatest involvement in food commodity trading and is one of the three biggest global players, along with the US banking giants Goldman Sachs and Morgan Stanley, research from the World Development Movement points out. Last week the trading giant Glencore was attacked for describing the global food crisis and price rises as a "good" business opportunity.
The extent of Barclays' involvement in food speculation comes to light as new figures from the World Bank show that global food prices hit an all-time high in July, with poor harvests in the US and Russia pushing up the average worldwide cost of staples by an unprecedented 10 per cent in a month. The extent of just one bank's involvement in agricultural markets will add to concerns that food speculation could help push basic prices so high that they trigger a wave of riots in the world's poorest countries, as staples drift out of their populations' reach.
Nor has the UK escaped rising food costs. Shop food prices have risen, on average, by 37.9 per cent in the past seven years, according to the Office for National Statistics, as the demands of an increasingly affluent and growing world population strain supply. Oils and fats have soared by 63 per cent in the UK during that period, fish prices by 50.9 per cent, bread and cereals by 36.7 per cent, meat 34.5 per cent and vegetables 41.3 per cent. In April, average UK food prices were 4.2 per cent higher than a year earlier.
Oxfam's private sector adviser, Rob Nash, said: "The food market is becoming a playground for investors rather than a market place for farmers. The trend of big investors betting on food prices is transforming food into a financial asset while exacerbating the risk of price spikes that hit the poor hardest."
The World Development Movement report estimates that Barclays made as much as £529m from its "food speculative activities" in 2010 and 2011. Barclays made up to £340m from food speculation in 2010, as the prices of agricultural commodities such as corn, wheat and soya were rising. The following year, the bank made a smaller sum – of up to £189m – as prices fell, WDM said.
The revenues that Barclays and other banks make from trading in everything from wheat and corn to coffee and cocoa, are expected to increase this year, with prices once again on the rise. Corn prices have risen by 45 per cent since the start of June, with wheat jumping by 30 per cent.
Barclays makes most of its "food-speculation" revenues by setting up and managing commodity funds that invest money from pension funds, insurance companies and wealthy individuals in a variety of agricultural products in return for fees and commissions. The bank claims not to invest its own money in such commodities.
Since deregulation allowed the creation of such funds in 2000, institutions such as Barclays have collectively channelled an astonishing $200bn (£126bn) of investment cash into agricultural commodities, according to the US Commodity Futures Trading Commission.
Barclays' dominance in commodities trading is thanks to its former chief executive Bob Diamond, who was Britain's best-paid banking boss until he was forced to resign last month following a £290m fine for attempting to manipulate the Libor interest rate. As boss of Barclays Capital he boosted trading in agricultural products.
Dealing with the reputational headache associated with high levels of food speculation will be yet another item in the already-bulging in-tray of Antony Jenkins, who was promoted to become Mr Diamond's replacement on Thursday.
Christine Haigh, policy and campaigns officer at the World Development Movement and one of the analysts behind the research, said: "No doubt the UK's biggest player in the commodities markets is hoping it will do better this year by cashing in on rising food prices. "Its behaviour risks fuelling a speculative bubble and contributing to hunger and poverty for millions of the world's poorest people."
Banks and hedge funds typically argue that speculation makes little or no difference to food prices and volatility and argue, correctly, that no definitive link has been proved. Barclays declined to comment on the amount of money it makes from trading in agricultural commodities yesterday.
The bank defended its actions, pointing out that trading in so-called futures contracts – an agreement to buy or sell a certain quantity of a product, at a given price on an agreed date – helped parties such as farmers and bakers to hedge against the risk of rising or falling prices. "Our clients include investment companies, food producers and consumers who, among other things, seek our help to manage risks."
Barclays also declined to comment on whether it thought large amounts of speculation pushed up prices and volatility. A spokesman said: "We recognise there is a perception held by some stakeholders that participation in agricultural futures markets by some participants can unduly influence the prices of commodities. As a result, we continue to carefully monitor market trends and any research produced on this subject," a spokesman said."
Barclays Capital analysts admitted in a note to clients in February that speculation did push up prices. Barclays said: "The second key driver is that commodity investors have begun allocating to commodities again after beginning 2012 heavily underexposed to the sector." The other drivers were the "health of the global economy" and "weather and geopolitics".
Source: The Independent
The extent of Barclays' involvement in food speculation comes to light as new figures from the World Bank show that global food prices hit an all-time high in July, with poor harvests in the US and Russia pushing up the average worldwide cost of staples by an unprecedented 10 per cent in a month. The extent of just one bank's involvement in agricultural markets will add to concerns that food speculation could help push basic prices so high that they trigger a wave of riots in the world's poorest countries, as staples drift out of their populations' reach.
Nor has the UK escaped rising food costs. Shop food prices have risen, on average, by 37.9 per cent in the past seven years, according to the Office for National Statistics, as the demands of an increasingly affluent and growing world population strain supply. Oils and fats have soared by 63 per cent in the UK during that period, fish prices by 50.9 per cent, bread and cereals by 36.7 per cent, meat 34.5 per cent and vegetables 41.3 per cent. In April, average UK food prices were 4.2 per cent higher than a year earlier.
Oxfam's private sector adviser, Rob Nash, said: "The food market is becoming a playground for investors rather than a market place for farmers. The trend of big investors betting on food prices is transforming food into a financial asset while exacerbating the risk of price spikes that hit the poor hardest."
The World Development Movement report estimates that Barclays made as much as £529m from its "food speculative activities" in 2010 and 2011. Barclays made up to £340m from food speculation in 2010, as the prices of agricultural commodities such as corn, wheat and soya were rising. The following year, the bank made a smaller sum – of up to £189m – as prices fell, WDM said.
The revenues that Barclays and other banks make from trading in everything from wheat and corn to coffee and cocoa, are expected to increase this year, with prices once again on the rise. Corn prices have risen by 45 per cent since the start of June, with wheat jumping by 30 per cent.
Barclays makes most of its "food-speculation" revenues by setting up and managing commodity funds that invest money from pension funds, insurance companies and wealthy individuals in a variety of agricultural products in return for fees and commissions. The bank claims not to invest its own money in such commodities.
Since deregulation allowed the creation of such funds in 2000, institutions such as Barclays have collectively channelled an astonishing $200bn (£126bn) of investment cash into agricultural commodities, according to the US Commodity Futures Trading Commission.
Barclays' dominance in commodities trading is thanks to its former chief executive Bob Diamond, who was Britain's best-paid banking boss until he was forced to resign last month following a £290m fine for attempting to manipulate the Libor interest rate. As boss of Barclays Capital he boosted trading in agricultural products.
Dealing with the reputational headache associated with high levels of food speculation will be yet another item in the already-bulging in-tray of Antony Jenkins, who was promoted to become Mr Diamond's replacement on Thursday.
Christine Haigh, policy and campaigns officer at the World Development Movement and one of the analysts behind the research, said: "No doubt the UK's biggest player in the commodities markets is hoping it will do better this year by cashing in on rising food prices. "Its behaviour risks fuelling a speculative bubble and contributing to hunger and poverty for millions of the world's poorest people."
Banks and hedge funds typically argue that speculation makes little or no difference to food prices and volatility and argue, correctly, that no definitive link has been proved. Barclays declined to comment on the amount of money it makes from trading in agricultural commodities yesterday.
The bank defended its actions, pointing out that trading in so-called futures contracts – an agreement to buy or sell a certain quantity of a product, at a given price on an agreed date – helped parties such as farmers and bakers to hedge against the risk of rising or falling prices. "Our clients include investment companies, food producers and consumers who, among other things, seek our help to manage risks."
Barclays also declined to comment on whether it thought large amounts of speculation pushed up prices and volatility. A spokesman said: "We recognise there is a perception held by some stakeholders that participation in agricultural futures markets by some participants can unduly influence the prices of commodities. As a result, we continue to carefully monitor market trends and any research produced on this subject," a spokesman said."
Barclays Capital analysts admitted in a note to clients in February that speculation did push up prices. Barclays said: "The second key driver is that commodity investors have begun allocating to commodities again after beginning 2012 heavily underexposed to the sector." The other drivers were the "health of the global economy" and "weather and geopolitics".
Source: The Independent
Tuesday, August 21, 2012
Arms deal inquiry should subpoena Tony Blair
Terry Crawford-Browne sets out the questions that need to be put to the former British PM
PRESS STATEMENT
The Seriti Commission of Inquiry into the arms deal has today refused my request to disseminate the submission that I made on 13 June 2012. The reason it offers is that the Commission was established to investigate allegations made in my submission, and, anyway as I had advised, that the contents of my submission are already in the public domain. The response declares:
This begs the question: what is the point of disseminating what is already in the public domain? What purpose will be served thereby?
Since these issues are the subject of eight books already published on the arms deal scandal and thus in the public domain, I record the summary of my submission:
Summary: Three of the six provisions of the Commission's terms of reference refer to offsets. The essence of this submission is that offsets fail the requirements of section 217 (1) of the Constitution that government procurements must accord "with a system which is fair, equitable, transparent, competitive and cost-effective."
Advocate Geoff Budlender SC's legal opinion is submitted to support my contention that the arms deal was unconstitutional and illegal right from inception, and is therefore unfixable. Advocate Budlender further advises that the international remedy for fraud is to cancel the contracts, return the equipment and recover the monies.
The Department of Trade and Industry has conceded that the offsets were a fiasco. Amongst documents I submitted to the Constitutional Court are 160 pages of affidavits that detail why and how BAE paid bribes of £115 million (R1.5 billion) to secure its warplane contracts, to whom the bribes were paid, and into which bank accounts they were credited.
The 1996 Defence White Paper and 1998 Defence Review noted that there was no conceivable foreign military threat to South Africa, and that socio-economic upliftment was the national priority. In terms of the guarantee arrangements for the loan agreements, the financial consequences of cancellation of the contracts would be borne by British and German taxpayers, not South Africans.
To reiterate, my submission confirms that the arms deal was unconstitutional and illegal right from inception, and is therefore unfixable. The crux of the matter is how to take urgent remedial action to recover the monies so that they may be allocated to South Africa's desperately needed social upliftment. Such a decision does not require three years of further investigations but, given the priorities purportedly accorded to the eradication of corruption, simply political will.
In addition and separately, I have last week requested the Commission to subpoena the former British Prime Minister, Mr Tony Blair. The questions I wish to pose to him include:
1. The pressure he applied on our government to buy BAE Hawk and BAE/Saab Gripen fighter aircraft despite rejection in 1997 of those proposals by the SA Air Force because these aircraft are both unsuited to South African requirements and too expensive,
2. The complicity of his government in BAE's payment of bribes of £115 million, and his placement of British officials to block investigations by the Auditor General and parliamentarians into the fraudulent offset contracts,
3. The default clauses of the 20 year Barclays Bank/ECGD loan agreements for the BAE contracts and (to cite legal counsel for Minister Trevor Manuel) "their potentially catastrophic consequences for South Africa,"
4. The role of the so-called "BAE/Al Yamamah slush fund" administered by the Bank of England, and its purpose to destabilise resource-rich countries in Asia and Africa. This question is particularly germane given the events last week at the British-owned Lonmin mine.
The request that Mr Blair be subpoenaed whilst he is in South Africa is still outstanding.
Statement issued by Terry Crawford-Browne, August 20 2012
Source: Politicsweb
PRESS STATEMENT
The Seriti Commission of Inquiry into the arms deal has today refused my request to disseminate the submission that I made on 13 June 2012. The reason it offers is that the Commission was established to investigate allegations made in my submission, and, anyway as I had advised, that the contents of my submission are already in the public domain. The response declares:
This begs the question: what is the point of disseminating what is already in the public domain? What purpose will be served thereby?
Since these issues are the subject of eight books already published on the arms deal scandal and thus in the public domain, I record the summary of my submission:
Summary: Three of the six provisions of the Commission's terms of reference refer to offsets. The essence of this submission is that offsets fail the requirements of section 217 (1) of the Constitution that government procurements must accord "with a system which is fair, equitable, transparent, competitive and cost-effective."
Advocate Geoff Budlender SC's legal opinion is submitted to support my contention that the arms deal was unconstitutional and illegal right from inception, and is therefore unfixable. Advocate Budlender further advises that the international remedy for fraud is to cancel the contracts, return the equipment and recover the monies.
The Department of Trade and Industry has conceded that the offsets were a fiasco. Amongst documents I submitted to the Constitutional Court are 160 pages of affidavits that detail why and how BAE paid bribes of £115 million (R1.5 billion) to secure its warplane contracts, to whom the bribes were paid, and into which bank accounts they were credited.
The 1996 Defence White Paper and 1998 Defence Review noted that there was no conceivable foreign military threat to South Africa, and that socio-economic upliftment was the national priority. In terms of the guarantee arrangements for the loan agreements, the financial consequences of cancellation of the contracts would be borne by British and German taxpayers, not South Africans.
To reiterate, my submission confirms that the arms deal was unconstitutional and illegal right from inception, and is therefore unfixable. The crux of the matter is how to take urgent remedial action to recover the monies so that they may be allocated to South Africa's desperately needed social upliftment. Such a decision does not require three years of further investigations but, given the priorities purportedly accorded to the eradication of corruption, simply political will.
In addition and separately, I have last week requested the Commission to subpoena the former British Prime Minister, Mr Tony Blair. The questions I wish to pose to him include:
1. The pressure he applied on our government to buy BAE Hawk and BAE/Saab Gripen fighter aircraft despite rejection in 1997 of those proposals by the SA Air Force because these aircraft are both unsuited to South African requirements and too expensive,
2. The complicity of his government in BAE's payment of bribes of £115 million, and his placement of British officials to block investigations by the Auditor General and parliamentarians into the fraudulent offset contracts,
3. The default clauses of the 20 year Barclays Bank/ECGD loan agreements for the BAE contracts and (to cite legal counsel for Minister Trevor Manuel) "their potentially catastrophic consequences for South Africa,"
4. The role of the so-called "BAE/Al Yamamah slush fund" administered by the Bank of England, and its purpose to destabilise resource-rich countries in Asia and Africa. This question is particularly germane given the events last week at the British-owned Lonmin mine.
The request that Mr Blair be subpoenaed whilst he is in South Africa is still outstanding.
Statement issued by Terry Crawford-Browne, August 20 2012
Source: Politicsweb
Tuesday, July 17, 2012
Probe into Absa takeover needed
President Jacob Zuma must appoint a commission of inquiry into Barclays bank's takeover of Absa Group [JSE:ASA] in 2005 and its link to the arms deal, activist and author Terry Crawford-Browne said on Monday.
"As a former international banker, I informed both the British and South African governments as early as October 1999 that the Barclays bank loan agreements for the (British defence company) BAE arms deal contracts would be fraudulent," he said in a statement.
"I also repeatedly pleaded with the former minister of finance Trevor Manuel not to sign those agreements."
He said the investigation should consider the implications of foreign control over South Africa’s banking system, including what pressure was applied to Manuel to approve the "ill-considered" takeover of Absa.
"The reality is that Absa, to the detriment of the South African public, has been milked by Barclays.
"Although Absa’s assets amount to only 4% of the total, Absa is reported to contribute 20% to total Barclays’ group revenue," he said.
"Surveys repeatedly find Absa to be the most expensive of South African banks. The former governor of the SA Reserve Bank noted as early as 2007 that he failed to see any benefits of Barclays' management at Absa."
Absa declined to comment on Crawford-Browne's claims, and presidential spokesperson Mac Maharaj could not be reached for comment.
Crawford-Browne said he had made a submission to the Seriti Commission - an arms deal probe - to request an investigation of perjury charges against Manuel and Maria Ramos in connection with the arms deal.
"Ms Ramos was then director general of the Treasury, and under oath, affirmed that the 'agreements... are self-standing loan agreements with binding force and not dependent on any other agreement entered into by government.'
"This lie was exposed by the Barclays bank loan agreements," he alleged.
He said he had previously submitted affidavits that detailed how BAE paid bribes of more than R1.5bn to secure its arms deal contracts, to whom the bribes were paid and to which bank accounts the bribes were credited.
The documents also revealed the complicity in money laundering of the British government and both international and South African banks.
He claimed that when a court awarded him with the discovery of the international offer's negotiating team and financial working group papers for the arms deal, Manuel and Ramos refused to comply.
"The court had previously rejected their arguments that it 'was not in the national interest to reveal how the government conducts its international financial arrangements'," he said.
"This is pertinent given enthusiastic approval by the minister in 2005 when Barclays Bank took over Absa with a 55.5% shareholding. What threats did Barclays Bank make?" he asked.
He said Human Settlements Minister Tokyo Sexwale was a major shareholder in Absa and a former director.
Ramos was appointed chief executive of Absa in 2009.
"Clear conflicts of interest are evident," Crawford-Brown said.
Source: News 24
"As a former international banker, I informed both the British and South African governments as early as October 1999 that the Barclays bank loan agreements for the (British defence company) BAE arms deal contracts would be fraudulent," he said in a statement.
"I also repeatedly pleaded with the former minister of finance Trevor Manuel not to sign those agreements."
He said the investigation should consider the implications of foreign control over South Africa’s banking system, including what pressure was applied to Manuel to approve the "ill-considered" takeover of Absa.
"The reality is that Absa, to the detriment of the South African public, has been milked by Barclays.
"Although Absa’s assets amount to only 4% of the total, Absa is reported to contribute 20% to total Barclays’ group revenue," he said.
"Surveys repeatedly find Absa to be the most expensive of South African banks. The former governor of the SA Reserve Bank noted as early as 2007 that he failed to see any benefits of Barclays' management at Absa."
Absa declined to comment on Crawford-Browne's claims, and presidential spokesperson Mac Maharaj could not be reached for comment.
Crawford-Browne said he had made a submission to the Seriti Commission - an arms deal probe - to request an investigation of perjury charges against Manuel and Maria Ramos in connection with the arms deal.
"Ms Ramos was then director general of the Treasury, and under oath, affirmed that the 'agreements... are self-standing loan agreements with binding force and not dependent on any other agreement entered into by government.'
"This lie was exposed by the Barclays bank loan agreements," he alleged.
He said he had previously submitted affidavits that detailed how BAE paid bribes of more than R1.5bn to secure its arms deal contracts, to whom the bribes were paid and to which bank accounts the bribes were credited.
The documents also revealed the complicity in money laundering of the British government and both international and South African banks.
He claimed that when a court awarded him with the discovery of the international offer's negotiating team and financial working group papers for the arms deal, Manuel and Ramos refused to comply.
"The court had previously rejected their arguments that it 'was not in the national interest to reveal how the government conducts its international financial arrangements'," he said.
"This is pertinent given enthusiastic approval by the minister in 2005 when Barclays Bank took over Absa with a 55.5% shareholding. What threats did Barclays Bank make?" he asked.
He said Human Settlements Minister Tokyo Sexwale was a major shareholder in Absa and a former director.
Ramos was appointed chief executive of Absa in 2009.
"Clear conflicts of interest are evident," Crawford-Brown said.
Source: News 24
Monday, July 2, 2012
Barclays chair Marcus Agius resigns
Barclays's chairperson Marcus Agius has resigned over interest rate rigging accusations as the bank faced possible criminal prosecution. The beleaguered bank announced his departure, and promised an independent audit, amid questions about the future of its chief executive Bob Diamond and generally about morality in London's financial sector, or City.
Britain's Serious Fraud Office (SFO) said it was considering whether it was "both appropriate and possible to bring criminal prosecutions" over the issue, adding that it hoped to come to a conclusion within a month. British finance minister George Osborne was set to address Parliament at around 3.30pm GMT to speak on the matter.
The manipulation of interest rates, which may turn out to implicate some other international banks, concerned the Libor and Euribor rates which play a key role on global markets, affecting what banks, businesses and individuals pay to borrow.
Barclays said that Agius, who has chaired the bank for six years, would remain in his post until a successor was found. But markets were also focused on whether Diamond, a high-profile and highly paid banker, would keep his job amid widespread calls for him to go. Markets were also wondering whether the latest banking scandal would result in a radical shake-up of the way in which business is conducted across the City, amid pressure from high up the political ladder. "I am truly sorry that our customers, clients, employees and shareholders have been let down," Agius said in a company statement, less than a week after the bank was fined by British and US regulators for alleged rigging of inter-bank rates.
Agius said: "Last week's events – evidencing as they do unacceptable standards of behaviour within the bank – have dealt a devastating blow to Barclays' reputation. "As chairman, I am the ultimate guardian of the bank's reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside," he said in the statement.
Barclays added that it would launch an independent audit that would "undertake a root and branch review of all of the past practices that have been revealed as flawed since the credit crisis started" about five years ago. The bank insisted that it would establish "a zero tolerance policy for any actions that harm the reputation of the bank".
Britain's business secretary Vince Cable on Sunday backed calls for a criminal investigation into bankers involved in the scandal. That was after Prime Minister David Cameron said he intended to bring Diamond and others at the bank to account. US national Diamond, who was in charge of Barclays' investment arm at the time of the suspected manipulation, was to face questions from British lawmakers on Wednesday.
The SFO on Monday said it had been working closely with the Financial Services Authority watchdog during the latter's investigation into Libor rate manipulation. "Now that the investigation into the issue of regulatory misbehaviour has concluded, the SFO are considering whether it is both appropriate and possible to bring criminal prosecutions," the independent government department said in a statement.
Pressure on Barclays has risen after British and US authorities last week together fined the bank £290-million amid international probes into several lenders over alleged rigging of overnight rates. Barclays is the first major financial institution to settle following investigations on both sides of the Atlantic.
On Sunday it emerged that bailed-out Royal Bank of Scotland (RBS) had sacked four traders over their alleged involvement in the affair, raising suspicions that the practice was widespread. Meanwhile the true cost of the scandal risks ballooning for Barclays. "Civil suits represent a significant uncertainty" for Barclays, Deutsche Bank analyst Jason Napier said on Monday. "We see challenges for plaintiffs to show that artificially suppressed or raised Libor estimates from Barclays ... shifted Libor on any given day and that financial loss followed as a consequence," he said in a note.
In afternoon London trading, the bank's share price jumped 3.23% to 168.11 pence on the benchmark FTSE 100 index, which was up 0.62%. Monday's gains helped the bank's share price to recover from last week's heavy losses that wiped billions of pounds from Barclays' market value. "Talk of Barclays and the Libor scandal remains the focus of the London market ... with the resignation of Barclays chairperson, Marcus Agius, compounding fears that the City is facing a significant shakeup in light of last week's events," said Spreadex trader David White.
Source: Mail & Guardian
Britain's Serious Fraud Office (SFO) said it was considering whether it was "both appropriate and possible to bring criminal prosecutions" over the issue, adding that it hoped to come to a conclusion within a month. British finance minister George Osborne was set to address Parliament at around 3.30pm GMT to speak on the matter.
The manipulation of interest rates, which may turn out to implicate some other international banks, concerned the Libor and Euribor rates which play a key role on global markets, affecting what banks, businesses and individuals pay to borrow.
Barclays said that Agius, who has chaired the bank for six years, would remain in his post until a successor was found. But markets were also focused on whether Diamond, a high-profile and highly paid banker, would keep his job amid widespread calls for him to go. Markets were also wondering whether the latest banking scandal would result in a radical shake-up of the way in which business is conducted across the City, amid pressure from high up the political ladder. "I am truly sorry that our customers, clients, employees and shareholders have been let down," Agius said in a company statement, less than a week after the bank was fined by British and US regulators for alleged rigging of inter-bank rates.
Agius said: "Last week's events – evidencing as they do unacceptable standards of behaviour within the bank – have dealt a devastating blow to Barclays' reputation. "As chairman, I am the ultimate guardian of the bank's reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside," he said in the statement.
Barclays added that it would launch an independent audit that would "undertake a root and branch review of all of the past practices that have been revealed as flawed since the credit crisis started" about five years ago. The bank insisted that it would establish "a zero tolerance policy for any actions that harm the reputation of the bank".
Britain's business secretary Vince Cable on Sunday backed calls for a criminal investigation into bankers involved in the scandal. That was after Prime Minister David Cameron said he intended to bring Diamond and others at the bank to account. US national Diamond, who was in charge of Barclays' investment arm at the time of the suspected manipulation, was to face questions from British lawmakers on Wednesday.
The SFO on Monday said it had been working closely with the Financial Services Authority watchdog during the latter's investigation into Libor rate manipulation. "Now that the investigation into the issue of regulatory misbehaviour has concluded, the SFO are considering whether it is both appropriate and possible to bring criminal prosecutions," the independent government department said in a statement.
Pressure on Barclays has risen after British and US authorities last week together fined the bank £290-million amid international probes into several lenders over alleged rigging of overnight rates. Barclays is the first major financial institution to settle following investigations on both sides of the Atlantic.
On Sunday it emerged that bailed-out Royal Bank of Scotland (RBS) had sacked four traders over their alleged involvement in the affair, raising suspicions that the practice was widespread. Meanwhile the true cost of the scandal risks ballooning for Barclays. "Civil suits represent a significant uncertainty" for Barclays, Deutsche Bank analyst Jason Napier said on Monday. "We see challenges for plaintiffs to show that artificially suppressed or raised Libor estimates from Barclays ... shifted Libor on any given day and that financial loss followed as a consequence," he said in a note.
In afternoon London trading, the bank's share price jumped 3.23% to 168.11 pence on the benchmark FTSE 100 index, which was up 0.62%. Monday's gains helped the bank's share price to recover from last week's heavy losses that wiped billions of pounds from Barclays' market value. "Talk of Barclays and the Libor scandal remains the focus of the London market ... with the resignation of Barclays chairperson, Marcus Agius, compounding fears that the City is facing a significant shakeup in light of last week's events," said Spreadex trader David White.
Source: Mail & Guardian
Sunday, July 1, 2012
UK politicians: Banking system is corrupt
British politicians have harshly criticised the country's banking system after Barclays was fined for manipulating data, with the leader of the opposition calling for an inquiry and government ministers joining the attack.
LABOUR leader Ed Miliband said the once-lauded banking sector has fallen into disrepute, claiming that over the last 20 years the word "banker" has gone from a compliment "to a gross insult." The British public "will not tolerate anything less than a full, independent and open inquiry" that will investigate every part of the industry, he said during a speech at the left-wing Fabian Society think tank.
US and British agencies on Wednesday imposed fines totalling $US453 million ($A452.62 million) on Barclays for submitting false data used in setting the London interbank offer rate (LIBOR), a key market index, between 2005 and 2009, to make its financial position appear stronger. US and British investigators say the employees of Barclays - and possibly those of other major international banks - clearly knew it was wrong to manipulate the London interbank office rate. The scandal has added fuel to public anger at the banking industry, whose executives face mounting accusations of being overpaid and unethical, and politicians from across the political spectrum were taking on the industry with tough language.
Business Secretary Vince Cable, a member of the Liberal Democrats, the junior partner to the Conservatives in Britain's coalition government, described the country's financial sector as "a massive cesspit." Justice Secretary Ken Clarke, a Conservative, said bankers who commit financial crimes must be brought to trial, telling the BBC that he suspected "financial crime is easier to get away with in this country than practically any other sort of crime."
The Royal Bank of Scotland, one of the banks that was bailed out by taxpayer money in the 2008 financial crisis, has also said it was being investigated for a similar scam. Britain's main financial regulator, the Financial Services Authority, uncovered serious failings in the way complex financial products have been sold to small businesses.
Source: news.com.au
LABOUR leader Ed Miliband said the once-lauded banking sector has fallen into disrepute, claiming that over the last 20 years the word "banker" has gone from a compliment "to a gross insult." The British public "will not tolerate anything less than a full, independent and open inquiry" that will investigate every part of the industry, he said during a speech at the left-wing Fabian Society think tank.
US and British agencies on Wednesday imposed fines totalling $US453 million ($A452.62 million) on Barclays for submitting false data used in setting the London interbank offer rate (LIBOR), a key market index, between 2005 and 2009, to make its financial position appear stronger. US and British investigators say the employees of Barclays - and possibly those of other major international banks - clearly knew it was wrong to manipulate the London interbank office rate. The scandal has added fuel to public anger at the banking industry, whose executives face mounting accusations of being overpaid and unethical, and politicians from across the political spectrum were taking on the industry with tough language.
Business Secretary Vince Cable, a member of the Liberal Democrats, the junior partner to the Conservatives in Britain's coalition government, described the country's financial sector as "a massive cesspit." Justice Secretary Ken Clarke, a Conservative, said bankers who commit financial crimes must be brought to trial, telling the BBC that he suspected "financial crime is easier to get away with in this country than practically any other sort of crime."
The Royal Bank of Scotland, one of the banks that was bailed out by taxpayer money in the 2008 financial crisis, has also said it was being investigated for a similar scam. Britain's main financial regulator, the Financial Services Authority, uncovered serious failings in the way complex financial products have been sold to small businesses.
Source: news.com.au
Thursday, December 22, 2011
Regulator Fines Barclays Capital Over Subprime Mortgages
The Financial Industry Regulatory Authority said on Thursday that it had fined Barclays Capital $3 million for misrepresenting information about subprime mortgage securities the bank had sold from 2007 to 2010.
Finra, as the nonprofit self-regulator is known, said in a statement that Barclays Capital had provided inaccurate data about the delinquency rates of mortgages packed into three securities. The misrepresentations “contained errors significant enough to affect an investor’s assessment of subsequent securitizations,” according to the agency.
That data was then referenced for five additional subprime securities, the agency said.
“Barclays did not have a system in place to ensure that delinquency data posted on its Web site was accurate,” J. Bradley Bennett, the agency’s enforcement chief, said in a statement. “Therefore, investors were supplied inaccurate information to assess future performance of RMBS investments.”
Barclays Capital neither admitted nor denied wrongdoing, though it consented to the fine. A spokeswoman for the bank declined comment.
Finra has fined several investment banks in the last two years, including Merrill Lynch and Credit Suisse in May and Deutsche Bank in July 2010.
Source: New York Times
Finra, as the nonprofit self-regulator is known, said in a statement that Barclays Capital had provided inaccurate data about the delinquency rates of mortgages packed into three securities. The misrepresentations “contained errors significant enough to affect an investor’s assessment of subsequent securitizations,” according to the agency.
That data was then referenced for five additional subprime securities, the agency said.
“Barclays did not have a system in place to ensure that delinquency data posted on its Web site was accurate,” J. Bradley Bennett, the agency’s enforcement chief, said in a statement. “Therefore, investors were supplied inaccurate information to assess future performance of RMBS investments.”
Barclays Capital neither admitted nor denied wrongdoing, though it consented to the fine. A spokeswoman for the bank declined comment.
Finra has fined several investment banks in the last two years, including Merrill Lynch and Credit Suisse in May and Deutsche Bank in July 2010.
Source: New York Times
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