The Parliamentary Commission on Banking Standards March 2013 report into the shambles that was HBoS is here.
Herbert Smith charged £1.8 million in fees for work on the Salz Review of Barclays’ Business Practices
See page 172 of the Salz Review document.
The 244 page Review only makes one mention of Barclays’s General Counsel (and that is in the context of his membership of a board committee).
The Review’s section on Board governance and the Appendix on “What is Culture and How Can It Go Wrong?” are vaguely interesting. Otherwise, the Review adds little to the recommendations of the Walker Review of Corporate Governance in UK banks.
““They drink too much alcohol, have too little sleep and too much caffeine and use too much cocaine, leading to atrial fibrillation at a younger age”
Bankers warned on heart problems as young deaths reported – eFinancialCareers. Excerpt:
“One 40-something financial services employee who had a near-fatal heart attack last year, said it’s not so much banking that’s bad for your heart as cocaine. “A lot of people in banking take cocaine when they’re younger – it is incredibly corrosive for the heart. Even if you stop doing drugs as you get older, it just takes a bit of stress in your 40s and – bam.”
He adds that many people in the City of London have heart attacks and then go back to work as soon as possible. “It’s all part of the problem. I know three really senior guys who had serious heart attacks and were back at their desks within six weeks because they wanted to show how tough they were. You should really have three months off.””
See also: “…if you’re earning £1m a year, after tax that’s £500,000; after the amount that’s in stock that you can’t access for three years, that’s £300,000; and you’ve got to educate three kids privately. Bankers aren’t wealthy any more”
Bonfire of the Vanities author in the Daily Beast on the demise of traders and the rise of quants, via the Facebook IPO:
“But it proved to be more than one unbelievably bollocksed-up IPO. May 17 was the day Wall Street got vaporized. After Facebook Day, all that “Wall Street” had been a metonymy for, the big money, the Big Picture of America’s economy, the excitement, the sense that this is where things are happening, was gone”
and John Coates’ work on the physiology of trading floors.
PRA should have to approve major bank M&A, says Treasury Committee in report on the FSA’s failures on RBS/ABN Amro
In its report on “The FSA’s report into the failure of RBS”, the Treasury Committee recommends that:
“that Government include an explicit requirement for the Prudential Regulation Authority to approve major bank acquisitions and mergers in forthcoming legislation and that HM Treasury, working with the relevant public bodies, report on the legislative or other changes it proposes to make to the current regime regulating acquisitions in the banking sector”.
Excerpts from the summary:
On 12 October 2012 HM Treasury published the draft Banking Reform Bill, “to implement key elements of the Independent Commission on Banking’s recommendations”. The Treasury press release is here and the draft Bill is here.
“…if you’re earning £1m a year, after tax that’s £500,000; after the amount that’s in stock that you can’t access for three years, that’s £300,000; and you’ve got to educate three kids privately. Bankers aren’t wealthy any more”
Alex Preston in the New Statesman on the rise and fall of investment banking, tracing the history of IBs from the Louisiana Purchase in 1803, through the rise of Barings and Rothchild, JP Morgan and Goldman Sachs in the nineteenth century, 1929 and Glass-Steagall, the de-regulation of the 1980s and 1990s, the debt boom and the financial crisis, to the new challenges to investment banks – regulation, disintermediation, shadow banking and overwhelming public antipathy.
UBS’s Kweku Adoboli’s e-mail on the day his rogue trades were uncovered.
Cummings goings: former head of HBOS Corporate division fined and banned by the FSA for “culture of optimism”
leOn 12 September 2012 the Financial Services Authority announced that is fining Peter Cummings – former head of the HBOS Corporate division - £500,000 and banning him from holding any senior position in a UK bank, building society, investment or insurance firm. As the FSA said, “this is the highest fine imposed by the FSA on a senior executive for management failings”.
The FSA press release is here and the Final Notice for Mr Cummings is here. Mr Cummings’ very punchy rejoinder is here, his objections focusing on (i) the FSA’s apparent conflict of interest in being both the regulator responsible for HBOS during its downfall and the body standing judgement over Mr Cummings, and (ii) the seeming unfairness of Mr Cummings having been the only HBOS executive punished by the FSA in connection with its collapse.
The action against Mr Cummings follows the regulator’s public censure of Bank of Scotland in March 2012 when, as we discussed here, it found that between 2006 and 2008 HBOS’s Corporate division lost control, didn’t know what it was doing and continued with a flawed strategy as competitors exited and markets worsened.
The completion of enforcement action against Mr Cummings means that the FSA will now commence work on its report into the causes of the failure of HBOS in 2008, the purpose of which report will be to:
- “explain why HBOS failed and cover the FSA’s supervision of HBOS and explain the focus of the enforcement actions; and
- inform a wider internal and public understanding of the causes of failure during the crisis (to the extent not already covered by the RBS report)”
From the FSA’s press release on its banning of Mr Cummings: