Page 77 - Bank Case Studies

The Way Ahead

The ring-fencing rules imposed by the

U.K. Government sought to avoid a

repeat of the 2008 crisis. Although
Barclays did not require a UK taxpayer-funded bailout, the

new rules applied to all lenders in Britain that had retail and
commercial or investment banking activities.

John McFarlane (Chairman) said that:

"Barclays is not efficient, we are not productive, we are

cumbersome,……We have [a] very large bureaucracy

and personal accountability is not as high as we need it

to be. And so it's not just a reduction in costs, it's a

change in the way we do things that's required here."(9)

But, Jenkins who was brought in 2012, to achieve these

changes and repair the tattered reputation of the bank by

addressing its “toxic culture” became someone who focused

on retail operations whilst cutting jobs at the investment

bank at such a speed that it was making the bank

unprofitable and inefficient. Unfortunately, he achieved this

without boosting earnings at the same time.

After little more than two years Barclays fired Jenkins after
he had a row with the head of its investment bank over the

future of the troubled division.

McFarlane said he favoured shrinking the investment bank,

maintaining or increasing the dividend paid to investors,

and buying more of Barclays’s profitable Africa business.