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Barclays review: Tell me something I didn’t know

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How ironic. A report into what went wrong at Barclays, which points the finger partly at excessive pay, cost a whopping £17-million ($26-million) to produce. The bank could hire a consultancy for years for that kind of money. Still, if the 236-page report with 34 recommendations helps steer Barclays away from the behaviour that has led to £4-billion of provisions and fines in recent years, then £17-million is money well spent.

The question for shareholders paying for the review, which was led by lawyer Anthony Salz, is whether the bank could have reached the same conclusions on its own. The review makes for interesting reading, but many of its suggestions look similar to what has been promised already. Since his appointment last November, chairman Sir David Walker has been talking about the need to address pay. Barclays has already outlined a new set of "values." And some of the recommendations on governance – banking expertise on the board, a cohesive senior executive team, a chief executive succession plan – are what shareholders expect anyway.

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Many of the suggestions, such as those on sales incentives in the retail bank, make sense. The £2.6-billion total provision for missold payment protection insurance comes largely from the retail part of the business (previously led by Antony Jenkins, who is now group chief executive). The Libor fine generated by the investment bank was a relatively modest £290-million. And the discussion of high pay for average performers, rather than just star bankers, shines a light on a wider problem.

Barclays share price fell by just 1.6 per cent on Wednesday, broadly in line with RBS. The Salz review reinforces everything Mr. Jenkins has already said about creating a customer-focused, ethical bank and will help hold him to account. But it gives us little new information about what sort of investment Barclays will be in the future.

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