Various sources including the UK’s Telegraph are reporting that Barclays’ Bank is revealing that the £500m ($779m) allocated for forex settlements with regulators won’t be enough! This all according to CEO Antony Jenkins. Sky News reported early on Wednesday that Mr. Jenkins believes U.S. authorities will push final settlement figures with the bank beyond the £500m figure. “My expectation is it will be a bigger number than that,” Mr. Jenkins said to Britain‘s Sky News, adding that the London headquartered multinational firm hoped to reach a settlement with regulators “in the course of next year.”
Being careful not to rile up mainstream pundits, he added that Barclays’ bonuses would attract fewer headlines this season. “If a business performs, we’ll pay; if it doesn’t, we’ll pay accordingly. It’ll be much less controversial,” Jenkins said in the interview to Sky News. Adding more detail, Mr. Jenkins signaled bonuses were likely to be cut to reflect an expected drop in profits at its investment bank. “I do not expect to be in a situation where profits are down and the bonus pool is up,” he told the Financial Times in a separate interview.
As far as manipulation of FX rates are concerned, it got interesting last week when we found out New York State Superintendent of Financial Services Benjamin Lawsky may have uncovered evidence that Barclays’ used automated systems to manipulate forex rates. Barclays’ has been under the watchful eye of New York State’s Department of Financial Services (DFS) since the summer when the New York banking regulator installed Forex monitors at Barclays. Due to these added developments, the fine Barclays’ faces will most certainly be bigger than first expected, causing the CEO and bank to go ahead and make public comments.