Barclay’s chief executive, Anthony Jenkins told Sky News earlier this week that the £500m the bank has set aside to settle allegations that they took part in the manipulation of the foreign exchange market will not be enough.
According to a BBC report, Jenkins said that he expects future settlements with US authorities to increase Barclay’s settlement figure to more than £500m. “My expectation is that it will be a bigger number than that.” He also said that Barclay’s hopes to reach a settlement with the regulator next year.
Jenkins said that a robust culture defines what a company stands for and that compliance keeps banks in check. “Just as in this country we have laws, and people obey those laws mostly because it's the right thing to do, sometimes you have situations where people don't obey the law and you need a policing function - in a bank, that's called the compliance department.”
Jenkins also said that Barclay’s have taken steps to strengthen compliance and change their culture. "Banks didn't have strong enough compliance departments. We've moved to strengthen ours. As I've always said, changing culture takes time. We're making progress - the industry has come a long way on both topics but we have work to do."
Last month, six banks had to pay £2.7bn in fines to the FCA, US and Swiss regulators, two of which included British banks. Barclay’s is the only British bank to put aside money after it rejected paying an early settlement claim, saying it wanted to wait for deal with other regulators.
The FCA report into the forex allegations detailed chat system records showing conversations between traders from a number of banks conspiring to drive the price of foreign exchange rates up or down to gain a profit at the expense of clients.
The traders assigned themselves nicknames and by using client code names encouraged each other to manipulate benchmarks so that currencies could be sold at a higher price than they were bought for by the bank.
The FCA reported that in one instance, RBS made a profit of $615,000 after traders brought down the cost of the pound against the dollar so the bank could reduce the price it paid clients. RBS has since suspended three employees and is investigating 50 others.
New York’s Department of Financial Services (DFS) suggested earlier this month that Barclay’s and Deutsche Bank may have programmed automated trading platforms to rig the currency markets and is currently investigating Barclays over forex claims.
By Nicole Miskelly, bobsguide Lead Journalist