Fix Culture First

Fix Culture First – De-Regulate Second

I was drawn to an article in this morning’s FT by Philip Augar. He argues that before de-regulating in banking we need to fix the industry’s culture. I could not agree more. We are going to get a wave of pressure to reduce red tape from Trump 2.0. There may even be pressure to lower capital requirements. Let’s make sure we replace these frameworks with a  “Behaviorial Management Framework”.

Citi Manages Promotion Expectations

It is understood that Citigroup will substantially reduce the number of “in-seat” promotions this year. The bank is seeking to hold down costs. Last year it promoted 8,000 employees. That figure is expected to only reach 2,000.

Barclays Settles with the FCA

I reported yesterday that Barclays was due in court at the Upper Tribunal to appeal an FCA fine for misleading investors in relation to a capital raising exercise at the height of the global financial crisis. I was wrong. Barclays decided to settle with the regulator and pay a discounted fine of £40 million. At the same time, the bank continues to assert that it did nothing wrong.

Cherry-Picking Charges

The US Department of Justice has charged Ken Leech with cherry picking. This is the practice of preferring clients in the allocation of trades. The co-chief investment officer of Western Asset Management is accused to placing trades with brokers but waiting to allocate the trades until he knew the outcome of his bets.