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January 2014

Abigail with attitude: Sants' inauspicious departure from Barclays

by Abigail Hofman

Someone else who also recently stepped down is Sir Hector

Sants, the former head of compliance at Barclays. Sants, a one-

time Credit Suisse banker, ran the wholesale division of the British

regulatory authority, the Financial Services Authority, from 2004 to

2007. He was then promoted to run the whole organization, which he

did until the FSA was dismantled in the middle of 2012.

This period was definitely not the finest hour for British financial

services. Nevertheless, Sants received a knighthood in the 2013 New

Year honours list. This is bizarre. It was on sainted Sants’ watch that

the FSA waved through the acquisition of Dutch bank ABN Amro by

Royal Bank of Scotland. This mistake cost British taxpayers billions

of pounds. It was also while Sants ruled that the government stripped

the former RBS boss, Fred Goodwin, of his knighthood. Yet the man

who effectively approved the deal, Hector Sants, then gets a

knighthood. I am bewildered.

With his knighthood firmly in place, Sants bounced off to be head of compliance at Barclays. Sources

murmur that he was in line for a compensation package of some £3 million (made up of salary, bonus and

potential participation in a long-term incentive plan). Unfortunately, in October of last year, Sants took a

sabbatical, suffering from stress and exhaustion. He then decided not to return to the bank.

Barclays’ CEO, Antony Jenkins, and chairman Sir David Walker, made a mistake hiring Sants. The

appointment was a headline admission – just in case anyone had been asleep for the past few years –

that the bank had regulatory problems that needed to be addressed. However, now that Sants has

limped off, the assumption has to be that what he found at the bank was less palatable than he envisaged.

Nobody goes on leave for "stress and exhaustion" if everything is plain sailing. And it certainly didn’t help

the firm that around the same time that Sants slipped away, Shaygan Kheradpir, Barclays’ chief

operations and technology officer, also resigned. At least the head hunters will be kept busy, but one does

rather get the impression that Barclays is a leaking and listing ship. A source grumbled darkly: "The way

things are going, I wouldn’t be surprised if the current Barclays bosses dissipated all the benefits of the

Lehman’s acquisition. In a competitive landscape, you need to be constantly moving forward."

Another source made a more general comment: "Basically, the regulators funked it! Despite all these new

rules, lower leverage and higher capital requirements, they never dealt head-on with the too-big-to-fail

problem. During the crisis, big banks got bigger: think JPMorgan, Bank of America and Barclays. Will that

keep us safer and make the world more secure? I don’t think so. I believe we’ve just created institutions

that are too big to run properly and therein lies the seeds of the next crisis. Of course, authorities have

devised blueprints for bailouts and winding down institutions caught up in a death spiral. But I’m not

convinced that in the glare of the headlamps, these won’t prove too complex and time-consuming. The

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Further reading

Abigail with attitude:

Christmas presents forbank CEOs

Abigail with attitude: Credit

Suisse's Dougan is

suffering death by athousand cuts

Abigail with attitude: RBS

resembles a rudderlessrabble

Abigail with attitude: UBS'

Ermotti is unmistakably

Swiss; JPMorgan is tryingtoo hard

2/17/2014 Abigail with attitude: Sants' inauspicious departure from Barclays /Euromoney magazine

http://www.euromoney.com/Article/3291617/Category/17/ChannelPage/8949/Abigail-with-attitude-Sants-inauspicious-departure-from-Barclays.html 2/2

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best solution would have been Glass-Steagall Mark II, a complete division between commercial and

investment banking. But the authorities baulked because that would have meant reneging on a lot of what

they had countenanced during the crisis."

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