Bank of England tells Barclays deputy chairman Sir Mike Rake to stay as 'counterweight' to interim boss John McFarlane

The Bank of England has demanded that Barclays deputy chairman Sir Mike Rake delay his planned departure amid concerns that temporary boss John McFarlane will be overly powerful in the job of executive chairman.

The Bank’s Prudential Regulation Authority (PRA) is this morning set to confirm that it has approved Mr McFarlane taking the role on a temporary basis while it hunts for a new chief executive to replace the ousted Antony Jenkins.

He will revert to the role of non-executive chairman when the bank has its new leader in place. But regulators are understood to have demanded Sir Mike stay in post as a counterweight until the instability at the top of the bank is resolved.

Sir Mike was this week announced as the new chairman of the payments processor Worldpay. He will take on the role in September, with the company eyeing what could be one of the biggest flotations in London for some time.

He is already chairman of BT, a role that is becoming increasingly demanding with the communications giant squaring up for a battle with competition watchdogs.

But it is understood that the PRA wants the experienced senior independent director at Barclays to smooth the transition. The regulator declined to comment.

The ousting of Mr Jenkins and his replacement – at least temporarily – by Mr McFarlane has been welcomed by the market, with the shares putting on more than 10 per cent. They closed at 280p, compared with 252p the day before Mr Jenkins’ departure was confirmed.

While Mr McFarlane played the key role in the ousting of Mr Jenkins, Sir Mike featured prominently in the announcement. However, reports emerged earlier this week that he was also planning to leave. In response, Barclays put out a press release on Wednesday saying he would stay on until at least the end of the year – before a second statement appeared saying he would remain in post until a new chief executive was hired.

That second statement was issued as an announcement to the Stock Exchange, which carries more force, and is understood to have been prompted by the PRA’s intervention. The regulator’s board met to discuss the approval of Mr McFarlane in the role of executive chairman.

In the statement Barclays said it wanted to “make clear that Sir Michael Rake will continue to serve on the Barclays boards as deputy chairman and senior independent director until such time as a new group chief executive is in post. John McFarlane has reverted to the role of non-executive chairman and a replacement senior independent director is in place. This is to ensure that the highest standards of corporate governance are maintained.

“Any conflict of interest which may arise in respect of his chairmanship of Worldpay will be managed in the normal manner.”

Panmure Gordon’s chief City commentator, David Buik, described the affair as “an astonishing piece of public relations mismanagement”, but argued that Mr McFarlane was the right man to push Barclays forward and had “no need of a wet nurse”.

Ian Gordon, Investec’s banking analyst, described the events as “a little untidy” but added: “Investors put a lot of faith in McFarlane. They like his previous track record and the market reactions bear that out.”