The chairman of the Financial Services Authority, Lord Turner, has sent a letter to Barclays’ chairman-designate, Sir David Walker, telling him that the few replacements which have been made at the top of Barclays, such as the removal of Bob Diamond, do not mean that the FSA is no longer concerned with the bank.
Barclays have been highlighted as having a particularly negative culture among their staff and their management, with issues like PPI mis-selling and the more recent Libor rigging scandal demonstrating that they were out to make as much money as possible through lies and manipulation. Lord Turner said that the bank had a “culture of gaming – and of gaming us”.
He indicated that throwing a few people out was not enough to change the overall mentality at Barclays and that they faced a real challenge in fixing their reputation and their practices if they were going to earn any respect again.
Walker will also be the first witness questioned by the parliamentary commission on banking standards, which was set up after Libor fixing by banks had been exposed.
The FSA has come under fire for not doing enough itself to stop banks from bringing economic ruin upon us, and so part of this letter may be Lord Turner attempting to demonstrate that the regulatory body does indeed have teeth, but it also means that people will be expecting him to follow through on these statements.
Other banks have begun stating the need for change, saying that the unpopular culture of bonuses in the banking industry must be brought under control and that public trust must be re-earnt. However, it is unclear how much of this is rhetoric and how much will actually be followed through on, and it is likely to be years until we find out.