P&M Notebook: Barclays and its markets mystery
GlobalCapital, is part of the Delinian Group, DELINIAN (GLOBALCAPITAL) LIMITED, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 15236213
Copyright © DELINIAN (GLOBALCAPITAL) LIMITED and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
People and MarketsCommentP&M Notebook

P&M Notebook: Barclays and its markets mystery

Barclays is a bank in a hurry. Though its most turbulent years are well past, it has not slowed down the pace of change.

Group chief executive Jes Staley came on board in December 2015, and has already remodelled the bank’s structure and senior management. 

The corporate and investment bank (CIB) structure, the creation of Barclays International, the preparation for ring-fencing — and the string of senior hires from Staley's old shop of JP Morgan, reportedly for substantial pay packages — have all changed the face of the UK bank since the days of his predecessor Antony Jenkins.

But there is something unusual going on. The bank has just announced a raft of changes to its investment banking and markets businesses.

Many of them are straightforward — the retirement of Sam Dean, head of European corporate finance, and the earlier retirement of Andy Jones, head of banking and CEO for Asia Pacific, create space at the top. 

That means some promotions, and some hiring. The bank said it was looking “internally and externally” for a head of Europe and Middle East banking. At this point, you would be a fool to bet against someone from JPM getting the nod, but perhaps Staley has hired enough Morgan bankers for now, and a promotion from inside would send a morale-boosting signal.

In markets though, things get weirder. Joe Corcoran, head of the division, has been made a vice-chairman, while Tim Throsby, president of Barclays International and CEO of CIB, has stepped in as interim head while he seeks a successor.

Which naturally raises the question of why Corcoran needs his hands taken off the wheel right now.

If Barclays is in need of new management in markets, why not hire or promote a markets head, and then move Corcoran upstairs to the new chairman role?

Actually, that in itself bears some examination. A vice-chairman or chairman in banking is pretty standard stuff — distinguished former business head given a bit more time to concentrate on client work, culture carrying, being an ambassador for the firm and so forth, while someone else takes on the management grind. 

Sometimes it’s a way to put a banker out to pasture; sometimes it’s a way to make the most of someone’s skills and contacts — it depends on the firm and the situation.

But that’s investment banking, not markets.

Corcoran, as a markets vice-chairman, will “work directly with the markets management team on many of our initiatives”, “continue to work with all of us on the Barclays International executive committee to further develop our markets strategy, particularly for the equities business” and “work with leaders across markets and SRM to grow our client relationships”, according to a memo seen by GlobalCapital.

But you know what other job would put you in a good place to develop business strategy in markets? HEAD OF MARKETS, the job Corcoran has just been moved out of.

For dedicated Barclays-watchers, the unusual “FiRM” structure might be a clue. That was Throsby’s first big reorg, in March. It involved moving Art Mbanefo, head of EMEA and APAC markets, into a role which mashed treasury and client-facing structuring and financing businesses together — spanning, in other words, a lot of the juiciest parts of the firm’s business.

There’s word, too, that Barclays is spending serious money on hiring. Filippo Zorzoli, Bank of America Merrill Lynch’s head of EMEA rates sales, and Kristen Macleod, head of US FX sales at Goldman Sachs, are said to be joining the firm, and a raft of new managing director hires in macro are supposed to follow. 

This was always one of the strongest businesses at Barclays, but the more structured end of rates trading was top of the list for the firm’s restructuring efforts. Perhaps, now, it’s back on the front foot?

There was lots to chew on at Goldman last week, too. David Rothnie made the most of the bank's move to promote the next generation in his Southpaw column — and zoomed in on Gary Cohn’s drive to increase the firm’s business with corporate, as well as institutional clients, before he left to serve President Trump. Goldman’s credit trading shocker in the first quarter remains a mystery, but you wouldn’t bet on the firm disappointing investors in Q2 as well.

Restructurings at Goldman always receive lots of attention, because of the aura the firm still has, but they are also usually an example of boring competence. Goldman is the bank to beat precisely because it rotates senior staff through divisions, cultivates the next generation assiduously, and successfully replaces individual loyalties with loyalties to the broader whole. 

There’s only so much Kremlinology a journalist can generate when everyone is basically pulling together in the service of making stupendous amounts of money.

It was a big week, too, for regulation. The luminaries of the derivatives market descended on Lisbon for the International Swaps and Derivatives Association’s annual general meeting, where, for probably the eighth year running, regulation was top of the agenda. This time, it was joined by Brexit for the first time, with another round of salvos in the euro clearing fight.

The European Securities and Markets Authority’s chairman Steven Maijoor made it clear, again, that ESMA doesn’t regard euro clearing in London after Brexit as a safe option. 

But Christopher Giancarlo, acting head of the US Commodities and Futures Trading Commission, highlighted the absurdity of this approach — and hinted at a retaliatory review of dollar clearing if ESMA keeps pushing for it.

“To date, the US has not deemed a body of water — even as large as the Atlantic Ocean — as an impediment to effective CCP supervision and examination," said Giancarlo.

Giancarlo, a former GFI executive who has inspired a bubbling-up of industry optimism on regulation, also took the opportunity to extol the virtues of market liquidity and the principal trading modelmusic to the ears of delegates.

Finally, GlobalCapital delivered some more exclusive regulatory content, when it sat down with Paul Tang, the MEP who terrified the European securitization market last year with proposals to bump up risk retention rules.

Tang has been willing to engage with the industry, and gave the keynote address to 3,000 profoundly hungover delegates at Global ABS last year. But despite promising a “critical but constructive” framework for securitization, he does seem determined to make risk retention more challenging.  

Gift this article