That’s odd, until you realise that there’s another reason DPAs can be ruled inappropriate: if they’re not in the public interest.
The SFO won’t say, but you have to ask: is Barclays is being taken to court to be made an example of to the baying public?
The “poor schmuck” in The Big Short who went to jail was Kareem Serageldin. Ever heard of him? Thought not. PR-wise, it would be convenient for a big name like Barclays to take his place.
Meanwhile, a successful prosecution wouldn’t harm Green’s efforts to save his organisation from Theresa May’s attempts to kill it.
Courageous Carney
He may be Canadian, but Mark Carney was today fighting like a lion for London. In an absolute demolition of the European sabre-rattling over settlement of trades, his Mansion House speech highlighted the utter idiocy of some EU hawks’ positions.
Not only would moving the clearing of euro-denominated derivative trades to Europe damage global financial stability, he said, but the people hurt the most would be the very European banks the EU wants to protect.
Creating the EU’s own, inefficient, little pool of clearing would mean banks there would face capital charges 10 times higher than today, leading to increased costs to European households.
His two real life examples of previous cases speak volumes: In Japan, where yen trades by some Japanese firms have to be done within the country, prices are as much as 3 basis points higher.
Likewise, the increased costs to Europe of splitting up the clearing of interest rate swaps would be around e22 billion a year.
In Canada, when Carney was the central bank governor there, they had similar concerns to the EU. They too carried out a deep review of where was the safest, most efficient place for Canadian dollar clearing to happen.
Carney’s conclusion? As long as the Canadian regulators had decent regulatory oversight, it had to be London. Sensible chap.
Europe’s politicians should follow suit and keep their Brexit jingoism in the cupboard. Their own populations, not ours, will suffer most if they don’t see sense.
