Simon English: Barclays' new boss could mean business as usual
Friday 31 August 2012
Outlook That rumbling sound you may be able to hear is this: traders at Barclays jumping up and down on their desks while they rip off their shirtsleeves in frenzied excitement about the money they are about to make.
Officially speaking the appointment of Antony Jenkins as the new chief executive is good news for the steady, boring, future of the bank. He's a new broom. A fresh pair of eyes (insert other cliches here).
He's from the solid, retail, mortgages and savings bit of the banking trade. He doesn't punt £2m on Iranian copper futures just because of a tip he got from a bloke in a pub. He's Mr Safe Hands. He shall change the Barclays culture that all agree is recklessly wild and needs taming.
"We need to change our culture which means setting out the values you expect from people and deal with those who don't follow them," he said as his promotion became public. "That is perfectly feasible."
Sensible stuff. And since he's not called Bob Diamond or Rich Ricci, even his name is reassuringly dull.
The lads on the floor of the investment bank that is the cause of most of the problems are greeting his appointment with glee.
They looked at his CV yesterday, and have noted that he has a Masters in Philosophy, Politics and Economics. They've met his sort before. He is also the executive responsible for diversity and inclusion at Barclays, is "closely involved" with a number of charities and a patron for Government employee engagement.
Pretty much perfect for a stitch-up, in other words. Here's a new guy around whom we can run rings, they are saying to each other.
For the traders at Barclays Capital, Mr Diamond was the perfect boss. He worked like hell and expected you to do the same; he was far from polite in general and niceties in the lift – forget about it. But the traders realised that if they gave him five years of their life, they'd be rich at the end.
He understood what they did and was on their side: in trader speak, that's a double-bubble. A result.
Mr Jenkins is not on their side, goes the new narrative, but he doesn't know what they do. So that's plainly better than someone who gets them and hates them, the thing they were most worried about.
It is impossible for him to understand what the trader guys are up to. All he will be able to see is the profit and loss account. As long as it's showing a profit – whatever the longer-term implications of the positions – well, he'd be brave to intervene and tell them to stop, especially if his rationale is that he just can't understand what they are up to.
As my banking correspondent puts it, the argument in the past for not appointing a retail banker to run the group was that he wouldn't be able to manage Barclays Capital.
He writes: "My sources on the inside say that Barclays is still very keen to keep the universal banking model, despite the fact that it is now widely recognised inside and outside that the retail bank cross-subsidises the investment bank, and the investment bank would not be able to fund on a standalone basis, if it wasn't for the retail deposits, and the implicit Government/taxpayer guarantee."
So what we could be looking at here is business as usual. There will be talk of change. A period of seeming stability. Then some roaring profits and massive bonuses, probably including for Mr Jenkins. Followed by spectacular losses.
That's the way to bet, anyway.
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