Sands of time are running low
WHEN Standard Chartered was accused of sanctions-busting with I r an and other rogue regimes by US regulator Benjamin Lawsky, i ts initial reaction was one of outraged innocence.
It subsequently accepted fines of more than £400m and has now had its probation period extended for another three years on top of an initial two, as the authorities pursue a fresh probe into possible sanctions-busting.
It is all a far cry from the days when chairman Sir John Peace dismissed the scandal as ‘clerical errors’.
Mutterings over the future of Peace and of chief executive Peter Sands are likely to resume.
They reached such a pitch earlier this year that the bank made public statements defending them, which is often the kiss of death.
It will not have helped that Barclays chairman Sir David Walker yesterday accused Peace – who also chairs Burberry and is Lord Lieutenant of Nottinghamshire – of having too many jobs.
Until the Lawsky affair, Sands had a stellar CV and seemed to have navigated the financial crisis with aplomb.
He can still point to a very strong past record, and moreover there are no obvious candidates to succeed him.
Former finance boss Richard Meddings has left the building, deputy chief Mike Rees is said to be out of the running and Standard’s culture and its emerging market focus make it tricky to fill the post from outside.
Sands is the last big bank chief executive still in post since the financial crisis, which is an achievement – but his grip is weakening.
Brief encounter
THE report by senior lawyer Simon Davis into the briefing of price sensitive information by the Financial Conduct Authority (FCA) is reveal- ing in terms of the attitude that is displayed towards the media. The FCA t hought ‘ mediahandling’ could be used as a ‘tool’ of regulation, language that should set alarm bells ringing for anyone who cares about a free press.
Some in the industry saw the regulator’s media strategy as a thirst for headlines on the part of FCA boss Martin Wheatley, who was possibly trying to blot out the appalling reputation of his predecessor watchdog the FSA.
But it is troubling that, among his recommendations, Mr Davis suggests that the FCA should try to assert quasi-Stalinist control over journalists, including demands to approve quotes or even whole articles prior to publication.
The assumption seems to be that the proper role of the media is to be an uncritical conduit.
Journalists would merely pump out the messages they are given and awkward questions would be off the menu.
This is patronising rubbish – of course, the media can legitimately help regulators to enforce clean markets.
Publicising fines and penalties should act as a strong deterrent to potential wrong- doers and help consumers, who are far more likely to read an article about regulation in Money Mail than the minutiae of a policy paper.
None of this means the FCA has any business trying to control or manipulate the financial press, even if it were capable of doing so.
It ought to be competent enough to brief journalists in a straightforward way without spilling the beans on price sensitive or confidential information.
After all, the companies it regulates by and large manage to do so. If one of them had been responsible for such a damaging leak, the fines would have been sky-high.
In some ways, this affair seems to be a storm in a teacup, with multiple job losses and a report costing more than £3m stemming from basic bungling.
But it has seriously weakened the FCA’s moral authority. Nor is this the only blot on the copybook. It looks likely that the public will have to wait even longer for the delayed report into the downfall of HBOS, that had been anticipated by the end of this year.
The findings are subject to ‘Maxwellisation’, where those criticised have the right of comeback, but even so, it is more than five years after the event.
John Griffith- Jones, the chairman, is in a conflicted position because he was previously the chair of KPMG, the firm that audited HBOS – and the troubled Co- op Bank – and failed to spot any problems.
As for Wheatley, he has lost his bonus over ‘Briefing-gate’ but kept his job. He cannot afford another mis-step.
Two for one
THE fall in Tesco’s share price is so steep that investors could now buy two supermarket chains for the price of one a year ago.
Caution is in order, however – the resetting of the relationship with suppliers and the battle with Aldi and Lidl mean new boss Dave Lewis is facing a long job. A full recovery will take years.