Barclays hit with another blow

Barclays is planning to axe around
1,000 jobs in its UK retail division while its investment banking arm has been
fined by the financial regulator.

The high street bank said it will
be moving its financial planning advice service online due to a continuing move
by consumer to manage their investments over the internet.

Barclays said it expects the trend
to continue.

Meanwhile, the bank’s investment
banking arm Barclays Capital has been fined $41.8 million by the financial regulator
for failing to separate and protect client deposits from its own funds for
eight years.

The Financial Services Authority
(FSA) said the investment bank had breached regulations by not keeping client
money separate from its proprietary account on an intra-day basis.

Under the FSA client money rules,
firms must ring-fence client funds in segregated accounts with trust status, to
help safeguard the money in case the firm collapses.

Although the client accounts in
question were separated overnight, BarCap unknowingly allowed funds maturing
from its sterling money market deposits to mix with its own funds for five to
seven hours every day.

The FSA argued that, if the bank
had become insolvent within those hours, the client money could have been lost.

The violations took place between
December 2001 and December 2009, and the highest amount of money at risk was at
one point $1 trillion.

The regulator pointed out that no
client money was actually lost due to the breach and the bank did not profit in
any way from it.

Barclays retail received a separate
$12 million fine last week for investment advice failings.


Barclays fined
Photo: File

Comments are closed.