A series of emails have been published by the US banking regulator that demonstrate the attitudes to serious offences that traders within Barclays held, with them swearing, laughing and joking about rigging energy markets and manipulating the price of electricity in order to generate a profit.
Barclays are denying that they were involved in any wrongdoing and have promised to appeal against the decision by the regulator to fine them. In a statement, the bank said it “strongly disagrees with the allegations […] We believe that our trading was legitimate and above board and intend to vigorously defend this matter.”
However, the emails appear to show a different story, with traders flaunting the fact they are engaging in rate manipulation and saying how much fun it is. MP on the Treasury Select Committee, John Mann, says that it’s indicative of the problems with modern finance: “This just shows how the rotten culture of casino banking that was built up under Bob Diamond went all the way through Barclays. Traders were clearly programmed to do anything to make a profit.”
After all the anger there has been over the huge bonuses bankers get in the last few years, it seemed that some people in the industry were finally starting to listen when Lloyds, one of the banks that was given huge sums by the tax payer to ensure it didn’t collapse, announced it was considering massive reforms to how it paid out its bonuses.
Now, however, the bank appears to have changed its mind, with a spokesman saying “we keep our remuneration plans under review at all times but have no current plans to change our structures and do not expect to do so in the foreseeable future.”
The argument for bonuses that the bank uses are that they are expected within the industry and that Lloyds has to offer competitive bonuses in order to draw in the best talent.
The Bank of Scotland has been fined £4.2million by the Financial Services Authority (FSA) after failing to keep an accurate record of compensation due to mortgage customers. The bank is part of the Lloyds Banking Group, meaning that this is yet another blow to one of the biggest players in the financial services industry.
Halifax, which is owned and operated by the Bank of Scotland, had kept incorrect records on numerous borrowers, which then resulted in 160,000 home owners not receiving the compensation they were entitled to after the bank failed to inform them of changes to their loans. The customers, who had found their repayment system altering with no warning, were supposed to receive a good will payment from the bank to make sure they weren’t adversely affected by the lack of communication, but it never reached them.