LONDON – The CEO of Barclays said having provisions to claw back bankers’ bonuses, as outlined by regulators on Wednesday, is a good idea in principle.
The Bank of England published new rules Wednesday to punish executives who misbehave. They include introducing a seven-year period from the date of the award in which the bonus can be retracted. Antony Jenkins told the BBC that such provisions are useful, though he was awaiting the details.
The debate on banker’s bonuses has become heated in Europe since the onset of the 2008 financial crisis. Critics blame the pursuit of astronomical bonus sums for fueling the risk-taking behaviour that triggered the troubles.
Jenkins has made corporate responsibility a key pillar of his tenure at Barclays, Britain’s second-biggest bank. The lender has been shaken by scandal and was fined by regulators in the U.S. and Britain for manipulating the London interbank offered rate, or LIBOR, a benchmark for trillions of dollars in loans.
“I would say that in principle I support the idea that where there is wrongdoing there should be appropriate punishment,” he said “If that’s criminal wrongdoing that should be criminal, if it’s recklessness that should be punished also. I’m not against the concept of clawback.”
Barclays reported that adjusted net income fell 14 per cent to 1.76 billion pounds ($2.9 billion) in the second quarter. Jenkins blamed foreign exchange movements for distorting results.
Jenkins dismissed a 67 per cent drop in profits for the investment banking division, describing it as in line with efforts to streamline the unit.
Though Jenkins has cut some 7,000 jobs in the division, he has raised the ire of investors by paying bigger bonuses.
The Bank of England’s banking oversight unit and the Financial Conduct Authority also announced they would consult on further measures to improve accountability in the banking sector, including rules that would require senior leaders to pass annual tests to show they are qualified to hold their jobs.