The clear-out of Barclays’ top brass plotted by Sir David Walker is an inevitable broadening of the purge triggered by the bank’s admission this summer that traders had manipulated Libor lending rates. Chief executive Bob Diamond – levered out by the governor of the Bank of England, no less – and chairman Marcus Agius – were the immediate casualties back then.
Now Sir David, Mr Agius’s replacement, is kitchen sinking – the accounting practice of ditching previous bosses’ baggage – by preparing to write off impaired people instead of impaired assets.
A Mr Clean has already been appointed chief executive in the form of retail bank boss Antony Jenkins, albeit that stiff costs for mis-sold payments insurance were incurred on his watch. But compensation claims weigh much more heavily on the reputation of finance director Chris Lucas, whose team underestimated liabilities by £700m. He is, moreover, closely associated with Mr Diamond, helping to create Protium, an off-balance sheet shelter for toxic loans that justifiably roused the wrath of the Financial Services Authority.
The aptly-named Rich Ricci, head of Barclay’s investment bank, can be expected to pursue wider opportunities too. He is the only remaining member of the Three Musketeers, as the triumvirate led by Mr Diamond was dubbed. He could be replaced by a candidate from a US investment bank relatively unscathed by the financial scandals of recent years.
Sir David, a former boss of the FSA’s predecessor, is meanwhile refreshing Barclays’ complement of non-executive directors. Tim Breedon, the socially-conscious ex-chief executive of Legal & General first identified by Mr Agius, is a smart choice. But Sir David should beware of simply substituting one bunch of City grandees for another – candidates apparently include Lord Levene and Lord Davies. At least one board seat at Barclays should be reserved for the owner of a small business, a category of borrower that has suffered badly at the hands of big banks.