Barclays will ride out the storm

Barclays has been landed with a £450m bill as well as facing delays to its share buyback plan and scrutiny from regulators after the bank “mistakenly issued $15bn-worth more of financial products in the US than it had permission to”, says the Financial Times. The mistake centres on its decision to issue $36bn of exchange-traded notes, which are linked to oil and volatility futures, despite the fact that it only registered $20.8bn (see Strategy, page 18). As a result, it will have to repurchase the notes at the price they were originally issued at. Shares dipped by 2.3% on the news.

The problem may seem little more than a “clerical error”, but it is proving “embarrassing and costly” and “raises further questions” about how the bank is run, says Rochelle Toplensky in The Wall Street Journal. Barclays has already been forced to commission an independent review into the matter and regulators are also conducting inquiries. Recently appointed CEO C.S. Venkatakrishnan will be in the spotlight, given that he was in charge of risk management at the time the paperwork was filed.

Regulatory investigations over the latest blunder will only add to the reputational pressure produced by the ongoing probe into the relationship former CEO Jes Staley (pictured) had with disgraced financier Jeffrey Epstein, says Hargreaves Lansdown’s Susannah Streeter. Soaring inflation and sluggish growth are also big challenges. Still, the underlying performance of the business is “positive” – the bank is well capitalised, well diversified and the prospect of higher interest rates “should help boost its net income margins”.