As we have written in the past, Barclays Capital prides itself on its refusal to employ “jerks.” It once got rid of someone who liked to travel to work in a limousine on the grounds that this was evidence of jerkishness. More importantly, for anyone who aspires to work at BarCap, experienced recruits are subjected to a laborious jerk-eliminating interview process known as “top grading.” Here, they go through 15-20 very similar, very rigorous Chronological Indepth Structured Interviews lasting for hours on end and scrutinising every aspect of their past behaviour on the grounds that it should be a predictor of their behaviour in future.
Nevertheless, yesterday’s grilling of Bob Diamond by the Treasury Select Committee revealed that the FSA had serious concerns about the culture at Barclays.
These were raised as far back as 2010, when assurances were sought that the culture would change. Diamond said the FSA later expressed worries that there were were “cultural issues” further down the organisation, “that people sometimes pushed back, that some of the push back wasn’t always followed up at the top.”
The 14 ‘rogue traders’ accused of manipulating Libor for their own ends were clear examples of jerks, implied Bob yesterday. But he said the other 140,000 employees were all good corporate citizens filled with outrage and indignation at the reprehensible jerkishness of those few.
Unfortunately, this doesn’t entirely wash. As Paul Mason points out, a Libor submitter in the US raised concerns about manipulating the rate with his compliance officer and was told to keep submitting low rates. The compliance officer said he/she would raise the issue with management and didn’t. The FSA’s concerns about a lack of ‘push-back’ or communication between staff and management at Barclays Capital is exemplified by this omission.
Yesterday, we wrote about the likely coming redundancies at BarCap and where they will probably fall. Equities, Asia and ECM were all identified as likely targets for job cuts. If Bob Diamond’s portrayal of endemic communication failures is correct, whole layers of middle and senior management may have to go too. Far from being free of jerks, the implication is that Barclays was full of them.