Barclays seeks quick fix for ring-fence

BARClAyS Bank could buy a shell company to acquire a banking licence as it attempts to find the quickest way to meet new rules that force banks to be split in two.

Barclays has a bigger task than rivals as all its operations are in one bank – with one licence.

last week chairman John McFarlane said: ‘If we need another bank, I’ve told the guys to go and get another one – to either get permission to get one or go and get one.’

A team led by chief operating officer Jonathan Moulds who joined in February is looking at all options.

If Barclays bought a shell company that had an existing banking licence it would save it applying for a new one. however, the process of tidying up the shell company and applying to the Prudential Regulation Authority for the change- of-use could be as time consuming as just applying for a new licence.

Moulds is in charge of Barclays’ Structural Reform Programme, which is overseeing the implementation of the ring-fenced bank and will make a decision by the end of the year.

This timeframe will allow Barclays time to start applying for a licence, if it needs one, early next year in time for the 2019 deadline. The process to apply for a licence takes between six and 12 months.

The ring-fencing rules have been put in place following recommendations that were passed into law from the Independent Commission on Banking to prevent catastrophes such as the taxpayer bailouts of lloyds and Royal Bank of Scotland following the financial crisis.

Barclays (up 5.65p at 273.7p) is different from lloyds Banking Group or Royal Bank of Scotland because it still has a significant investment banking division and it plans to keep a major element of its business outside the ring-fence.