Not Quite Convinced or Satisfied by Soft Contrition

Financial Times

Sir, In `Casino jibes do our banks no justice` (September 24), Barclays` outgoing chief executive, John Varley, makes a soft act of contrition and a misrepresentation that core investment banking activities of universal banks consist primarily of positions backing products and services with embedded derivatives providing clients with risk management tools. He says nothing about proprietary trading, which brought many banks to the brink of failure, often at great taxpayers` risk and expense.

Barclays avoided such a rescue mostly due to two strokes of luck rather than internal prudence or risk management skills. The acquisition of ABN Amro sunk RBS and Fortis rather than Barclays, who would have been lumped with it save for the bigger fools in the room. The blind acquisition of Lehman, which was vetoed at the 11th hour by the British authorities, saved Barclays from self-destruction.

Barclays owes the British public more than a soft contrition. It owes a big thank you rather than hints of temptation to relocate if regulators take measures to address its `too big to fail` systemic risk.