It has taken the best part of 10 years but, finally, the first bankers are facing criminal charges for their alleged actions in relation to raising capital at the height of the global financial crisis.
Four of the most senior former executives at Barclays bank - and Barclays itself - have been charged with conspiracy to commit fraud in relation to the 2008 credit crunch fund-raising that allowed the bank to avoid having to succumb to a government bailout.
If convicted, the bankers - former Barclays chief executive John Varley, Roger Jenkins, Tom Kalaris and Richard Boath - could face up to 10 years in jail.
‘The man who saved Barclays’
These were some of the most powerful and most lavishly paid bankers in the City when the financial crisis erupted - Roger Jenkins, for example, earned £40 million in a single year and once stepped out with supermodel Elle “The Body” Macpherson. He was known as “the man who saved Barclays”, having master-minded the near-£12 billion emergency fund-raising for the bank, around half of which came from Qatari investors.
Varley and Jenkins have also been charged by the Serious Fraud Office with “provision of unlawful financial assistance” in relation to the fund-raising, an offence that carries a sentence of up to two years.
Jenkins and Boath deny the charges and say they will “vigorously” defend themselves. Lawyers for Kalaris and Varley declined to comment. Barclays, meanwhile, has said it is considering its position.
The dramatic action by the fraud office, which sent a chill through the City yesterday, is the culmination of a five-year investigation centring on side-deals with Qatari investors during the controversial fund-raising, including fees of £322 million paid by Barclays and a $3 billion loan to the state of Qatar.
This wasn’t how it was supposed to be for Barclays, the bank that was so proud of having managed to avoid begging for taxpayer cash during the crash.
Chief executive Varley and his team were cock-a-hoop after completing the fund-raising - not for them the indignity of having a Treasury shareholder breathing down their neck for years, as with Royal Bank of Scotland and Lloyds Banking Group.
A torrid time
It may have avoided a bailout, but the bank has had a torrid time since then, culminating in the SFO action. The list of disasters and reputational damage is a lengthy and varied one, from Libor-rigging fines to the most recent whistleblowing scandal engulfing the current chief executive, Jes Staley.
The four bankers are to appear at Westminster magistrates' court on July 3rd, but it is likely that the case could take years. The fallout has already begun, however - Varley yesterday stepped down from his position as senior independent director of FTSE 100 mining giant Rio Tinto.
In a statement, the Rio Tinto chairman, Jan du Plessis, said: “The board holds him in the highest regard and will miss his valuable insight.” A spokesman for BlackRock Inc, where Varley is also on the board, said he was still a board member and declined to comment further.
‘Not yet the time’ for rate increase
New members of the Bank of England’s monetary policy committee tend to vote with the majority of their fellow rate-setters early on in their tenure, or at least until they find their feet.
But if Prof Silvana Tenreyro happened to be seeking some clues as to the views of her soon-to-be boss Mark Carney, she needed look no further yesterday than the City's Mansion House.
The great and the good of the Square Mile gathered at the historic building opposite Threadneedle Street at breakfast time to hear the Bank of England governor’s speech, originally due to have been given at a white tie dinner last week, but delayed because of the Grenfell Tower tragedy.
Economists were caught on the hop last Thursday when three of the eight-strong committee voted for interest rates to rise from their current record low of 0.25 per cent.
Hammered home
The governor, who voted for rates to remain unchanged, hammered home his point yesterday, making clear the view that “now is not yet the time” for an increase.
Carney cited the uncertainty of the impact the Brexit negotiations will have on the UK economy, along with the “mixed signals” on consumer spending and business investment, rising inflation and weak wage growth.
Where the latest member of the MPC stands on rates is, as yet, unknown. Her views on Brexit are clear though - Tenreyro is a fierce critic of Britain's departure from the European Union, believing it will damage the economy. She's not alone in that.
A professor of economics at the London School of Economics since 2012, Tenreyro replaces Kristin Forbes - who has repeatedly voted for a rate rise - and her first meeting will be in August. The committee is still one member down, following the departure of deputy governor Charlotte Hogg, and news of an appointment is expected soon.
Fiona Walsh is business editor of theguardian.co.uk
