The Financial Conduct Authority’s and Prudential Regulation Authority’s joint £642,000 fine of Jes Staley, chief executive of Barclays, has damaged the reputation of Barclays after he interfered in the compliance officer’s domain, industry officials said. It should be a wake-up call for boards in all banks, they said.
Staley failed to act with due skill, care and diligence in the way it responded to an anonymous letter received by Barclays in June 2016, the FCA said. The resulting fine and continuing monitoring at Barclays is the regulator’s first action under the senior managers’ regime.
Jeffrey Davidson commented that individual managers under the regime that are being dragged into the sunlight means reputational damage is inevitable.
“I think reputational damage to Barclays has been caused,” said Jeffrey, who has recently acted as a consultant for, among others, the FCA.
“This affects staff’s view of their own bank. They had a whistle-blowing process, but it was easy for the process to be overridden,” he said.
“Cases like this are a good prompt for financial institutions to make sure they are doing more than lip service to their own environment. Banks need to go and check their money laundering, whistle-blowing and bribery policies to give effect to the substance of the matter,” Jeffrey said.
There is an opportunity here to strengthen the authority of in-house counsel and heads of risk in banks, he said. “They are supposed to be independent of operational activity but are often pushed back from the board.”
Read Jeffrey’s comments in Thomson Reuters