A great deal of Barclays’ historic survivability has been attributed to its international presence for customers. In 2008, the bank avoided any need for a bailout due to this same international clientele, thriving by 2018. A great deal of this international support originated with the help of backers in the UAE and Qatar. The overall amount totalled to an emergency fund of £11.8 Billion, keeping the bank’s head above the water.
But while we live within a decades distance of the financial crisis, some issues remained unresolved for Barclays. As the bank has come under scrutiny by the Serious Fraud Office in June 2017, coming to public attention this year. The charges, in the worst case scenario, could result in the loss of the bank’s retail license, doing untold damage.
The Qatari Connection – Barclays foul play?
The 2008 support the bank received from funding by Qatari, Singapore and UAE backers allowed them to sidestep bailouts. However, the legality of a subsequent deal the bank made with the Qatar government is the crux of allegations against them. According to the SFO, between October and November 2008, the bank provided $3bn to Qatar’s government. With the intention of ‘Directly or indirectly‘ purchasing shares in the bank to support its ongoing recovery.
The SFO has since brought charges against the bank and four of its major Officers on counts of fraud and unlawful assistance. John Varley, Former Chief Executive, Roger Jenkins, Senior Investment Banker. Former chief executive of the wealth division, Thomas Kalaris. And Ex-European head of financial institutions, Richard Boath.
The Bank resolutely opposes these accusations, citing them as payments for ‘Advisory Services’ to the government. The wider consequences of a guilty verdict are certain to affect users.
Barclay’s Gulf Guilt – What it might mean for customers
According to the Guardian, while the initial charges were against the bank, it threatens action against its retail arm. If this was the method chosen after a guilty verdict, it would mean retail banking on the high street would face major closures. Meanwhile, this would place pressure on the Financial Conduct Authority to strip the bank of its license.
While the likelihood of this is small, the FCA would still need to take some punitive measure in the event of a guilty verdict. What verdict and what measure of punishment would be exacted remains to be seen.