Jim Armitage: Barclays wants a scrap over this ‘scandal’ just as JPMorgan is set to pay up


It’s never easy to be sympathetic with Barclays, let’s be honest. Clearly, this is a bank which has behaved appallingly in the past, whether in rigging Libor, mis-selling PPI, or allegedly using funny methods of securing billions of bailout money from the Qataris.

It’s simple to take the view that banks, and bankers, are an evil lot and every time they get nobbled and fined they’ve been got bang to rights.

But something smells different about this latest fine against Barclays from the US – or at  least, in the bank’s response to the charges.

For newcomers to this latest “scandal”: Barclays stands accused by the US Federal Energy Regulatory Commission (Ferc) of rigging the Californian electricity markets between 2006 and 2008. The allegation is that it manipulated the price of power in order to boost the profits from derivative positions that it had in place. The fine, confirmed this week, is for $453m (£297m).

Deutsche Bank faced similar charges and offered to pay up in January. A measly $1.5m  fine ensued.

Barclays has a track record of doing the same: fess up, pay the fine and move on. Even when doing so gets a big dollop of manure poured over your head by the serried ranks of Westminster and Fleet Street.

The trend of accepting responsibility has been particularly marked under the new chief executive, Antony Jenkins (known internally as AJ), who is still able to exercise the new broom’s prerogative of kitchen sinking all the evils of the past and blaming previous management.

But not so the Ferc allegations.

Barclays will, he says “vigorously defend” his predecessors on this case.

“We strongly disagree with the allegations... against Barclays and its former traders” (note  that “former”). “We believe our trading was legitimate and in compliance with applicable law,” he says, adding the order is “a one-sided document”.

“See you in court, suckers,” he concludes. OK, that last one was my paraphrasing, but is effectively what he means when he declares that, in a federal court, the regulator will have the “burden” of proving its allegations against Barclays’ counter arguments.

It’s fighting talk. Particularly amid reports last night JPMorgan is close to settling for far more.

Sources at Barclays are uncharacteristically vehement in their dismissal of the charges, too. Sure, they say, there is evidence of dumb things said by traders in emails. And yes, the statements are really stupid: “You going to have fun with the index all month?”, “Crazy. I love it” . They don’t look good. But the bank will argue in court that this was just trading-room bravado, and that the Ferc has no serious evidence that proves the traders actually acted on their emailed boasts – no proof that they manipulated the prices. They will argue that the size of the punishment is bonkers, too: a $453m fine for $35m in allegedly wrongful profits.

Barclays will be aware you don’t generally take on US regulators and win. Likewise, you wouldn’t generally back a bank in any case heard in a federal courtroom.

So either AJ is naive, or sure of his case.

Beijing’s new boss puts boot into ‘gift’ givers 

The Chinese government was in sabre-rattling mode yesterday.

I use the metaphor advisedly: speaking of the GlaxoSmithKline affair, The People’s Daily, a mouthpiece for the government, said that China must “lift a sharp sword to pierce the improper, even illegal, costs behind rising drug prices”. Other industries must watch out, too, the paper said. Bribery will no longer be tolerated. Seasoned China watchers observe all this and smile behind their sleeves. The truth of the matter is that bribery – under the pseudonym of “gifting” – is as endemic in the country as rice and noodles. Gifts oil the deals in China like they do across the developing world. And as the country’s economy has grown during the liberalisation years, so has the size of the gifts.

But, with the arrival of the new premier, Xi Jinping, last year, that is changing. One of his first acts was to condemn the corruption and lavish lifestyles of state officials, much to their annoyance.

One official, Yang Dacai, known locally as “Brother Watch”, was even sacked as his penchant for expensive wristwatches came to the attention of those higher up the administration.

Cue sales warnings last autumn from the purveyors of luxury presents like Burberry, LVMH, Richemont and the Swatch group – owner of the expensive watch brands Omega and Breguet.

Now, with the state media back on the march against corruption, luxury companies fear the clock is ticking once again for China’s lucrative gifts market.

Plenty of hope in OBR’s 50-year forecasts

When it comes to phoney sciences, it’s hard to say which is the more inexact, futurology or economics.

In the Office for Budget Responsibility’s report yesterday, we had a mixture of the two.

The OBR, through no fault of its own, has been tasked with, every year, creating a bunch of economic forecasts stretching out  50 years ahead.  If you are sceptical of such an exercise, you are right to be so. However, there was some hope for us all in yesterday’s instalment of this annual pin-and-blindfold game. Particularly those who pride ourselves as being “deficit deniers”.

The OBR said that, to reach the stated target of reducing the national debt to 40 per cent of GDP by 2062-63, all we have to save is  1.2 per cent of GDP – a measly £19bn in current money.

Given that the deficit is currently running at £120bn, and this year alone, the Government will be cutting the structural deficit by £10bn, it doesn’t sound too scary, does it? Perhaps we can keep our welfare, NHS and libraries after all.

Start your day with The Independent, sign up for daily news emails
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Raheem Sterling of Liverpool celebrates scoring the opening goal
footballLIVE: Follow all the latest from tonight's Capital One quarter-finals
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Life and Style
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
ebooksNow available in paperback
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Not quite what they were expecting

When teaching the meaning of Christmas backfires

Arts and Entertainment
Angelina Jolie and Sony Pictures co-chairman Amy Pascal at the Golden Globes in 2011
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Ashdown Group: Java Developer - North West London - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Selby Jennings: Corporate Communications & Marketing Specialist – Geneva

120,000 - 150,000 chf + bonus: Selby Jennings: A leading Swiss Private Banking...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Scandi crush: Stockholm is rivalling Silicon Valley

Th Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum
France's Front National and the fear of a ‘gay lobby’ around Marine Le Pen

Front National fear of ‘gay lobby’

Marine Le Pen appoints Sébastien Chenu as cultural adviser
'Enhanced interrogation techniques?' When language is distorted to hide state crimes

Robert Fisk on the CIA 'torture report'

Once again language is distorted in order to hide US state wrongdoing
Radio 1’s new chart host must placate the Swifties and Azaleans

Radio 1 to mediate between the Swifties and Azaleans

New chart host Clara Amfo must placate pop's fan armies
Homeless Veterans appeal: 'It's life, and not the Forces, that gets you'

Homeless Veterans appeal: 'It's life, and not the Forces, that gets you'

The head of Veterans Aid on how his charity is changing perceptions of ex-servicemen and women in need
Torture: It didn't work then, it doesn't work now

Torture: It didn't work then, it doesn't work now

Its use is always wrong and, despite CIA justifications post 9/11, the information obtained from it is invariably tainted, argues Patrick Cockburn
Rebranding Christmas: More public bodies are refusing to give the festival its name for fear of causing offence

Rebranding Christmas

More public bodies are refusing to give the festival its name for fear of causing offence. They are missing the point, and we all need to grow up